On June 30, 2023, the Centers for Medicare & Medicaid Services (CMS) released its FY 2024 proposed payment rule for home health services. One important change is that they are proposing a 2.2% reduction in the total home health payments, which amounts to approximately $375 million.
Additionally, the agency suggests implementing a permanent behavioral adjustment of -5.1% in CY 2024 as a result of the Patient-driven Groupings Model. This adjustment would lead to a reduction of $870 million in total payments. Furthermore, the agency proposes a modest 0.2% increase in payments for cases that involve unusually high costs.
While it was expected, industry leaders have expressed disappointment in another significant cut in payment.
It is important to remember that a permanent rate adjustment of -3.925% was already put in place in 2023. However, it appears that there will be additional payment cuts that could have severe consequences for the home health industry as a whole.
Other Notable Changes
Changes to the Home Health Value-Based Purchasing (HHVBP) Model
Apart from the payment reductions, CMS has proposed changes to the Home Health Value-Based Purchasing (HHVBP) Model, which include removing five quality measures and adding three new measures starting in 2025. The new measures focus on discharge function scores, discharges to the community, and potentially preventable hospitalizations during home health care coverage. CMS is also suggesting modifications to HHVBP’s baseline year to ensure more current benchmarks and achievement thresholds for all applicable home health agencies.
Home health providers were hoping that CMS would rectify forecast errors in 2022 and 2023. However, CMS has been unwilling to address those errors, which could have a lasting impact on base rates if left uncorrected.
Separate Payment for Disposable Devices Used for Negative Pressure Wound Therapy (NPWT)
There are additional proposed changes concerning wound care, particularly regarding the use of disposable devices. Payment for these devices would be separate from nursing and therapy services associated with their use.
CMS is proposing to implement statutory requirements for NPWT using a disposable device in home health care. Starting from January 1, 2024, there will be a separate payment for the device itself, while the services related to applying the device will be covered under the home health prospective payment system. The reporting of the disposable device on home health claims will also undergo changes, with applicable NPWT disposable devices being reported using HCPCS code A9272 on claims submitted under TOB 32x instead of TOB 34x, which is the usual claim type for home health agencies.
Be Ready Now
While efforts from Congress and other industry advocates are being made to try to curb further payment cuts, home health agencies should be prepared to navigate these changes.
On top of persistent challenges in the industry such as staffing shortage, higher patient acuity, and increasing operational costs due to inflation, it is crucial for home health businesses to maximize efficiency in their operations by focusing on their main objectives.
Getting the right support in key areas such as documentation compliance and clinical back-office staffing, can really make a difference in ensuring success and business continuity amid the ever-changing industry landscape
