CMS recently released its proposed payment rule for home health services for FY 2025, which indicated that providers could face significant cuts in the near future. In response to budgetary concerns and to rebalance the Patient-Driven Groupings Model (PDGM), CMS is suggesting a permanent adjustment to the home health payment rate for CY 2025.
This adjustment would result in a -4.067% reduction in payments, following reductions of 3.925% for CY 2023 and 2.890% for CY 2024. The proposed rule aims to align assumed behavior changes with actual changes in home health expenditures following the implementation of the PDGM in CY 2020. To achieve this goal, there is a 2.5% payment increase for CY 2025, but this is offset by a 3.6% decrease related to PDGM rebalancing and a 0.6% decrease due to a proposed fixed dollar loss.
In summary, Medicare payments to home health agencies could decrease by approximately $17 million or about -17%, totaling around $1 billion less than in FY 2018 if these cuts are implemented as proposed by the Centers for Medicare & Medicaid Services (CMS).
