Volume 25.03
The home health industry is standing firm in its criticism of the Home Health Proposed Rule which will again significantly reduce payments to home health agencies effective January 1, 2026.
CMS’s own data reports that over 1,000 home health agencies have closed between 2019 and 2024, and home health users has decreased by 20%. Half of all U.S. counties lost at least on home health agency. Even so, CMS is proposing additional reductions to home health payments while agencies continue to experience significant increases in expenses.
The National Alliance for Care at Home (“Alliance”) has expressed the following concerns regarding the basis for payment cuts:
- Data from 2022 and beyond reflects unrelated policy changes and market disruptions, not behavior changes due to PDGM.
- The inclusion of highly suspicious claims from Los Angeles County, California that impact CMS’s calculations for the permanent and temporary adjustments as well as undermine the integrity of the payment system. CMS has taken steps to exclude fraudulent data in other programs, such as adjusting benchmarks in the Medicare Shared Savings Program to remove highly suspect and anomalous data but has failed to take similar steps for home health.
- Exclusions of large amounts of data and the assumptions used in CMS’s analytical approach introduce bias, undermine the accuracy of CMS’s calculations, and are unrelated to the new case-mix adjustment methodology under PDGM and the transition from a 60-day episode to a 30-day unit of payment.
The Alliance also reports that since 2015, Inpatient Rehabilitation Facilities and Skilled Nursing Facilities have received payment updates totaling 29.1% and 30.4% respectively. During the same period, home health payments have only increased by 1.4%. During this same period labor costs have significantly increased. Labor costs represent the single greatest cost of a home health agency.
The Alliance’s full comments on the proposed rule can be secured here.
COST REPORT PLANNING
If your cost reporting period ends on September 30, 2025, or December 31, 2025, it is time to be planning for the preparation of that report. Home health agencies should make certain that communications are underway with those responsible for preparation. Most importantly:
- Identify when financial records will be completed and available for cost report preparation,
- Ensure that statistics used in the preparation of the report are being accumulated and will be available as soon as possible, and
- Areas at issue when the prior year cost report was prepared have been addressed for the current year filing.
If you have not been contacted by those responsible for cost report preparation you should initiate a call to better prepare for the upcoming filing.
A FEW SPOTS REMAIN AVAILABLE FOR THE UPCOMING HOSPICE FINANCIAL ADMINISTRATION CONFERENCE
A few spots remain for the upcoming 2025 Hospice Financial Administration Conference scheduled for October 16-17, 2025, at the Hilton Orlando Lake Buena Vista – Disney Springs Area. Special hotel rates are available through September 14, 2025, for conference attendees. The hotel is within walking distance from Disney Springs and shuttle service to the Disney properties is included with your reservation.
Several topical coverages have been expanded from prior programs based on attendee feedback. The program offers an expanded breakout Hospice CAP session and cost report session in response to requests by previous attendees. Significant attention is also provided regarding integrity and expanding claims audits processed. As always, space is limited at our programs to provide for more interactive discussions intended to meet your educational needs.
The program agenda, hotel reservation link, and registration information are available here. On Thursday, October 16th we will be offering a short reception immediately after the conclusion of the program. This is a great opportunity to network with other attendees. If you have any questions regarding the program, do not hesitate to reach out to us.
We look forward to seeing you in Orlando.