CMS Proposes Changes to Home Health Payments, Resulting in Significant Reductions and Uncertainty for Providers

The Centers for Medicare & Medicaid Services (CMS) recently released its proposed rule for the home health prospective payment system for calendar year 2025. The rule includes several changes that could significantly affect payments to home health agencies (HHAs).

One of the most significant changes is a 3.0% market basket update, which would increase payments by this amount. However, this increase is offset by a 0.5% productivity adjustment, resulting in a net increase of only 2.5%. Additionally, CMS is proposing to reduce the base payment rate by 4.1% due to the Patient-driven Groupings Model, which would decrease total payments by 3.6%.

These adjustments are expected to result in an estimated $280 million reduction in net home health payments, or -1.7%, in calendar year 2025 compared to the current year. This reduction could have a significant impact on HHAs and their ability to provide quality care to patients.

The American Hospital Association (AHA) has expressed concerns about these adjustments, noting that they come on top of previous years of similar downward adjustments. The AHA believes that these cuts could lead to reductions in staffing levels and quality of care provided by HHAs.

In addition to these changes, CMS is also proposing to adjust the fixed-dollar loss amount for high-cost outliers, which would further reduce payments by an additional 0.6%, or $100 million. This could result in even more significant reductions in funding for HHAs.

Another change proposed by CMS is the revision of infection prevention and control requirements for long-term care facilities. This would extend reporting to the Centers for Disease Control and Prevention of certain COVID-19 data elements and also require reporting of data related to influenza and RSV starting Jan. 1, 2025. This could help improve public health outcomes and reduce the spread of infectious diseases in long-term care facilities.

CMS is accepting comments on the proposed rule until August 26. AHA members will receive a Special Bulletin with additional details on the rule in the near future