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On November 1, 2023, the Centers for Medicare & Medicaid Services (CMS) issued the calendar year (CY) 2024 Home Health Prospective Payment System (HH PPS) Rate Update final rule, which updates Medicare payment policies and rates for Home Health Agencies (HHAs).  The final rule covers a variety of changes and updates, many not relevant to home health agencies.

This rule includes routine updates to the Medicare Home Health PPS payment rates for CY 2024 in accordance with existing statutory and regulatory requirements. As described further below, CMS estimates that Medicare payments to HHAs in CY 2024 will increase in the aggregate by 0.8 percent, or $140 million, compared to CY 2023.

CMS is finalizing a permanent prospective payment adjustment to the CY 2024 home health 30-day period payment rate to account for any increases or decreases in aggregate expenditures because of the difference between assumed behavior changes and actual behavior changes, due to the implementation of the Patient-Driven Groupings Model (PDGM) and 30-day unit of payment as required by the Bipartisan Budget Act of 2018.

The finalized -2.890 percent permanent adjustment is half the full permanent adjustment of -5.779 percent (-5.653 percent in the proposed rule). As a result of CMS finalizing roughly half of the full permanent adjustment projected, Medicare payments to HHAs in CY 2024 will increase in the aggregate by 0.8 percent, rather than a 2.2 percent decrease as initially proposed.

In addition, CMS is finalizing its proposals that include:

  • To rebase and revise the home health market basket.
  • Revise the labor-related share.
  • Recalibrate the PDGM case-mix weights.
  • Update the low utilization payment adjustment (LUPA) thresholds, functional impairment levels, and comorbidity adjustment subgroups for CY 2024.

The proposed, and now final rule calculates home health payment rates based on significantly flawed underlying factors.

William Dombi, President of NAHC, is quoted in the most recent NAHC Report, “We continue to strenuously disagree with CMS’s rate setting actions, including the budget neutrality methodology that CMS employed to arrive at the rate adjustments.  We recognize that CMS has reduced the proposed 2024 rate cut.  However, overall spending on Medicare home health is down, 500,000 fewer patients are receiving care annually since 2018, patient referrals are being rejected more than 50% of the time because providers cannot afford to provide the care needed within the payment rates, and providers have closed their doors or restricted service territory to reduce care costs.  If the payment rate was truly excessive, we would not see these actions occurring.  The fatally flawed payment methodology that CMS continues to insist on applying is having a direct and permanent effect on access to care.  When you add in the impact of shortchanging home health agencies on an accurate cost inflation update of 5.2% over the last two years, the loss of care access is natural and foreseeable.”

NAHC, and others are continuing to seek other remedies, including legislation, to head-off the implementation of the payment rates as included in the final rule.

The final rule includes several enrollment provisions that apply to hospices as well as other provider types.

The final rule also includes a new informal dispute resolution (IDR) process for hospice programs and a special focus program (SFP) to provide enhanced oversight of the poorest-performing hospices, building on similar oversight and enforcement programs focused on nursing homes.

Find the final rule here.

Read a fact sheet on the rule.