Industry Still in Shock Following Release of Home Health Final Rule

McKnight’s Home Care | By Adam Healy
Home health and hospice providers are still reeling from the release of last week’s home health rule. The regulation slapped home health providers with more Medicare cuts and finalized a Special Focus Program for hospices based on what providers believe is a flawed algorithm.
“It’s a punch in the gut, really, for providers,” Katie Smith Sloan, president and CEO of LeadingAge, said to McKnight’s Home Care Daily Pulse in a press conference at LeadingAge’s annual meeting. “And it’s really baffling to me that you can have an administration that says we need to support our older adults, we need to provide quality care, and yet we can cut reimbursement.”
The rule, released last Wednesday, included a permanent behavioral adjustment of -2.89%, prompting outcry from providers and advocates for the home health industry. These cuts came atop a permanent rate reduction of 3.925% this year, and many organizations like LeadingAge believe it may be too much for agencies to handle.
“It further squeezes the home health providers out there who are already struggling with workforce issues, increased costs,” Sloan said. “I have no idea what the thought process is. They clearly have done a disservice.”
How the cuts were implemented may unevenly affect providers of different sizes, markets or types, LeadingAge’s experts also said. 
“Doing it in aggregate means you’re treating all people equally,” Mollie Gurian, vice president of home based and HCBS policy at LeadingAge, said in an interview with McKnight’s Home Care Daily Pulse at the meeting. “Even whether their margins are 30% or whether their margins are 2% or negative. And it’s going to cause closures.”
The Special Focus Program for hospices also drew criticism for the algorithm that determines what providers are to be placed on the list. Since the provision was finalized without modification in the rule released last week, LeadingAge has explored ways to delay or prevent the SFP before it goes into effect on Jan. 1, 2024, according to Gurian.
“We’ve been strategizing about whether there’s a legislative approach that could help to delay it,” Gurian said. As to whether this possibility could be successful, “Probably not, but it’s worth trying, and I think we have support,” she said.
Luckily, CMS left room for further discussion, according to Katy Barnett, director of home care and hospice operations and policy, in an interview with McKnight’s Home Care Daily Pulse.
“There was some language in there after each of the sections finalizing the proposal that they really did clearly think that more conversation would be necessary,” Barnett said.
But if implemented, the SFP is expected to create a sort of “chilling effect” among providers, which might steer consumers away from unfairly-targeted hospices. It may not cause providers to halt hospice services, but it could reduce access to quality care, she noted.
“I don’t think it necessarily will drive providers out,” Gurian said. “I don’t think people will stop doing hospice because of the existence of a special focus program. But we do think if the wrong providers are identified, it could have a scarlet letter effect that is unfortunate … which would affect access ultimately.”