Home Health Stakeholders Call On CMS To Rectify ‘Significant’ Forecast Errors From 2021, 2022

Home Health Care News

Home health stakeholders are urging the Centers for Medicare & Medicaid Services (CMS) to address an alleged forecast error in the home health market basket for 2021 and 2022.

Broadly, CMS calculates the expected impact of cost inflation for home health agencies annually. In order to do this, CMS relies on a forecasting methodology from a private entity that is applied to the most recent cost data available for home health care.

“That forecasting tool attempts to gauge cost trends as an indicator of where future costs in the upcoming year will end up,” William A. Dombi, the president of the National Association of Home Care & Hospice, told Home Health Care News in an email. “As with any forecasting, errors can and do occur once actual cost changes are known. Over the years, these errors have sometimes been in the provider’s favor and other times not.”

The forecasting errors for 2021 and 2022 were significant, according to Dombi.

They resulted in a 5.1% shortfall in the annual payment rate updates for those years.

Last month, The Partnership for Quality Home Healthcare (PQHH) and the NAHC penned a joint letter to CMS. In the letter, PQHH and NAHC recommended that CMS advance a proposal for a one-time forecast error correction for 2021 and 2022 in the upcoming proposed rule.

“After a conversation we had with senior officials at CMS – who were asking about some of the economic conditions related to workforce, and the costs of retention and recruitment – we did take the opportunity to follow up our conversation with a letter that really focused on showcasing the fact that in 2021 and 2022, for home health, the market basket was significantly off,” PQHH CEO Joanne Cunningham told HHCN. “This translates to billions of dollars that did not go into the rate structure for home health, which is really important.”

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