[Updated] CMS Proposed Over 4% Cut to Home Health Medicare Payments in 2025

Home Health News | By Andrew Donlan

The U.S. Centers for Medicare & Medicaid Services (CMS) published its FY 2025 home health proposed payment rule [last]Wednesday. With it, the agency signaled that more significant cuts could be on the way for providers.

To rebalance the Patient-Driven Groupings Model (PDGM) and make it budget neutral, at least according to its internal methodology, CMS is proposing a permanent prospective adjustment to the CY 2025 home health payment rate of -4.067%.

For CY 2023 and CY 2024, CMS previously applied a 3.925% reduction and a 2.890% reduction, respectively.

“This adjustment accounts for differences between assumed behavior changes and actual behavior changes on estimated aggregate expenditures due to the CY 2020 implementation of the PDGM and the change to a 30-day unit of payment,” CMS wrote in a fact sheet on the proposed rule.

The CMS proposed rule includes a CY 2025 home health payment update of 2.5%, which is offset by an estimated 3.6% decrease related to the PDGM rebalancing and an estimated 0.6% decrease that reflects a proposed fixed dollar loss…

Continued cuts

Over the last few years, CMS has generally proposed large cuts, then finalized smaller cuts. But even when the cut is lowered between the proposed and final rule, providers lose out on those finalized cuts.

So, for instance, even a 1.7% cut may not appear very large. But an over 4% permanent cut is extremely significant.

Additionally, CMS also mentioned the clawbacks it intends to collect from the industry for perceived past overpayments. Those now sit at about $4.55 billion.

“The Administration has repeatedly expressed its support for care in the home, recognizing it as a high quality, lower cost alternative to institutional care settings that expands access to Medicare beneficiaries in the location in which they prefer to receive care: Their homes,” Stacey Smith, the vice president of public policy at AccentCare, said in a statement shared with Home Health Care News. “The home health community has repeatedly offered solutions to CMS that would reduce spending, while at the same time maintaining payment levels for those agencies that deliver high quality care and play by the rules. Yet CMS persists in its mathematical gymnastics that will give rise to nothing short of inferior health outcomes, lower patient satisfaction and stranding at-risk, older adults in higher cost, institutional care settings.”…

In addition to the cuts, CMS is also proposing: a recalibration Adjustment (LUPA) system, including an occupational therapy LUPA add-on factor; further delineations for the home health wage index; and more…

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[Details can be found in the CMS fact sheet. The proposed rule is posted to the Federal Register here, with comments due August 26, 2024.]

Lawmakers Remain Committee to Passing Hospice Workforce Bill

Hospice News | By Jim Parker

Federal legislators plan to continue to work on passing a bill designed to bolster the hospice and palliative care workforce.

The Palliative Care and Hospice Education Training Act (PCHETA) has come before Congress several times but has not yet been passed. The bill’s most recent development occurred in July 2023, when it was reintroduced by Sens. Tammy Baldwin (D-Wisc.) and Shelley Moore Capito (R-W.Va.).

Capito has indicated that the senators are not giving up on the legislation as they seek to ensure that hospice and palliative care providers are able to meet growing demand.

“Senator Baldwin and I are committed to getting this bill across the finish line so the next generation of hospice and palliative care providers can be trained,” Moore Capito told Hospice News. “As someone whose loved ones have benefitted from hospice care and palliative care, I know how important this care is to both the patient receiving the care and the patient’s family. Unfortunately, like so many areas of health care, hospices are being impacted by workforce shortages and I fear that this could impact the ability of patients and families to access this vital type of care. “

PCHETA was first introduced in 2017. If enacted, PCHETA would authorize $100 million over the course of five years to support programs designed to bolster clinical education in hospice and palliative care, along with related interdisciplinary professions such as chaplaincy, pharmacy and social work.

The legislation would establish fellowships through new palliative care and hospice education centers to provide short-term, intensive training, as well as incentivized award programs across all the relevant disciplines. It also would support programs to develop career paths within the field…

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Compared to Traditional Medicare, MA Does Not Generate Significant Savings for Members, Study Finds

McKnight’s Home Care | By Adam Healy
 
Though Medicare Advantage plans offer out-of-pocket spending limits and other perks, they may not reduce beneficiaries’ healthcare costs in a meaningful way, according to a new study published in Annals of Internal Medicine.
 
The researchers sampled 7,054 traditional Medicare enrollees and 1,544 beneficiaries who switched from traditional Medicare to MA. Those who switched saw their out-of-pocket healthcare expenditures decrease by $168 dollars, and total health expenses paid out of pocket drop by only 0.2%. Participants who had reported “catastrophic” financial burden as a result of healthcare costs in traditional Medicare — meaning their out-of-pocket healthcare expenses accounted for more than 40% of their income — experienced only a 0.7% decline in healthcare expenses.
 
Those who switched to MA also were slightly more likely to report being unable to pay medical bills, the study found.
 
“Our findings contrast with the notion that MA’s apparently more generous health insurance benefits lead to financial savings for enrollees,” the authors wrote.
 
Many beneficiaries switch from traditional Medicare to MA to receive better coverage at a lower cost, they noted. MA plans can offer additional benefits such as dental, vision and Special Supplemental Benefits for the Chronically Ill, including home-delivered meals, transportation and home modifications. Meanwhile, MA plans also have limits on out-of-pocket spending, which can further entice traditional Medicare beneficiaries.
 
Despite these perks, switching from traditional Medicare to MA did not yield significant cost savings for enrollees, the study found.
 
Still, MA penetration has skyrocketed in recent years. Today, more than half of Medicare-eligible beneficiaries are enrolled in an MA plan. The growing share of MA-enrolled beneficiaries has led to revenue challenges for home care providers. Many agencies report being reimbursed from MA payers as little as 60% of traditional Medicare’s rates for care. 

And cost management practices such as prior authorization have led to administrative roadblocks and payment bottlenecks for providers treating MA-aligned patients.

Medicare Telehealth Flexibilities Will Expire in December. Congress Needs to Act Swiftly, Experts Say

MedCity News | By Marissa Plescia
 
Telehealth advocates are calling on Congress to act quickly on Medicare telehealth flexibilities, which are set to expire at the end of the year. Doing so would help key healthcare stakeholders prepare.
 
Telehealth advocates are calling on Congress to act quickly on Medicare telehealth flexibilities, which are set to expire at the end of the year. Doing so would help key healthcare stakeholders prepare.
 
Before Covid-19, only a small sliver of Medicare beneficiaries could access virtual care. They had to be in a rural setting, not an urban or suburban setting. They also could only use telehealth in an approved originating site, like a hospital or physician’s office. Just 2% of Medicare beneficiaries meet this criteria, according to McDermott+Consulting.
 
These restrictions were waived during Covid-19, thereby greatly expanding access to telehealth services for Medicare beneficiaries. Congress has extended the waivers twice — most recently through the Consolidated Appropriations Act of 2023 — but they are set to expire on December 31. This would result in telehealth returning to a rural-only benefit once again for Medicare enrollees. 
 
Unless Congress acts, that is, and the clock is ticking.
 
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Legislative days are limited in an election year, which is why telehealth advocates are calling on Congress to pick up the pace so key healthcare stakeholders like the Centers for Medicare and Medicaid Services (CMS) have adequate time to prepare for the reimbursement of telehealth.
 
“Congress should just go ahead and do what we know they’re going to do anyhow and not allow these flexibilities to expire and save us from sweating it up until the very last minute,” said Kyle Zebley, senior vice president of public policy at the American Telemedicine Association, in an interview. “I’m very confident that Congress will do that. But just because of how Congress works … the Christmas decorations will be up when we see this and we’ll be within throwing distance of all these flexibilities expiring before Congress finally takes action.”…

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