The Biden administration is proposing an $810 million cut to Medicare payments to home health agencies next year due to the implementation of new changes to how payments are calculated.
The Centers for Medicare & Medicaid Services (CMS) released late Friday a proposed rule outlining changes to the 2023 Home Health Prospective Payment System and updating rates for home health agencies. In addition to the payment update, CMS is calling for comments on collecting telehealth data on home health claims.
CMS is proposing a 4.2% decline in Medicare payments to home health agencies for 2023, a decline of $810 million compared with 2022 rates. The agency is proposing a 2.9% increase for home health payments, but that bump is washed out after considering a 6.9% decline to reflect adjustments to behavioral assumptions for home health use.
The large dip for agencies reflects reforms installed back in 2020 for home health payments. A 2018 spending law required CMS to “better align payments with patient care needs, especially for clinically complex beneficiaries that require more skilled nursing care rather than therapy,” CMS said in a fact sheet on the new rule.
CMS was required to create new assumptions about behavioral changes in home health and to change the payment rate from a 60-day unit to a 30-day period. The agency each year must determine the impact of differences between the assumed behavior changes and actual changes from 2020 through 2026.
For 2023, CMS is implementing a re-pricing methodology that determines the impact of behavior changes for estimated aggregate expenditures, the agency said.
Under the new method, the agency is proposing a 7.69% permanent adjustment to the 30-day rate.
CMS is also proposing to collect data on how telehealth technology is used for home health. It calls for soliciting comments on the use of virtual care services applied at the beneficiary level.
“Collecting data on the use of telecommunications technology on home health claims would allow CMS to analyze the characteristics of the beneficiaries utilizing services furnished remotely, and could give us a broader understanding of the social determinants that affect who benefits most from these services, including what barriers may potentially exist for certain subsets of beneficiaries,” the fact sheet said.
The agency also wants stakeholder feedback on the workaround health equity measures for the home health quality reporting program.