On Nov. 1^st, the Centers for Medicare and Medicaid Services (CMS) issued its Calendar Year (CY) 2024 final rule for the Home Health Prospective Payment System (PPS). It will be posted in the Federal Register on Nov. 13^th.

The final rule presents serious concerns for certified home health agencies (CHHAs) and providers as CMS is carrying out further rate reductions implementing the permanent behavioral assumption adjustment changes made in response to the Patient-Driven Groupings Model (PDGM) back in 2020. CMS finalized half of the behavioral adjustment that it had proposed, that will cut payments by a net 2.6 percent, with a plan to apply the remaining adjustment in future years. Medicare law requires CMS to make permanent and possibly temporary adjustments intended to ensure that the transition to PDGM is budget-neutral in comparison to expected Medicare spending on the 2019 payment model.

The rule will increase home health payments by a net $140 million, or 0.8 percent, in CY 2024, relative to 2023. This update is the result of a 3.3 percent market basket update, reduced by a 0.3 percent productivity adjustment ($525 million increase), and an additional 2.6 percent cut ($455 million decrease) accounting for a behavioral assumption adjustment. In addition, CMS also adjusted the fixed-dollar loss ratio for outlier payments, which will increase payments by a net 0.4 percent ($70 million increase.)

CMS did not take any action on the $3.3 billion in anticipated temporary adjustments to address alleged overpayments in 2020, 2021, and 2022.

Other significant highlights in the final rule include:

• A market-basket increase of 3.0 percent based on an annual inflation update of 3.3 percent, reduced by a 0.3 percent productivity adjustment.
• An increase in the 30-day payment rate from $2,010.69 to $2,038.13 after application of the PDGM budget neutrality adjustment, market-basket update, a wage-index budget neutrality factor, labor-related share neutrality factor, and case-mix recalibration neutrality factor adjustments. Agencies that do not submit required quality data will have that rate reduced by 2 percent.
• Low Utilization Payment Adjustment (LUPA) rates set at the following amounts: Skilled Nursing: $168.37; Physical Therapy: $184.03; Speech Language Pathology (SLP): $200.04; Occupational Therapy (OT): $185.29; Medical Social Work: $269.87; and Home Health Aide: $76.23.
• CMS finalized its proposal to remove five measures from the current Home Health Value-Based Purchasing (HHVBP) applicable measure set and add three measures starting in CY 2025. Due to the net change in the number of measures, CMS will adjust the weights for the measures in the Outcome and Assessment Information Set (OASIS)-based and claims-based measure categories starting in CY 2025. CMS also updated the Model baseline year to CY 2023 for all measures starting in CY 2025.

LeadingAge National has published this initial review of the final rule. The summary is not exhaustive, and we encourage members to read the whole rule. The public inspection copy of the rule is linked here. A copy of the fact sheet that accompanied the rule is available here.

LeadingAge NY members should join the LeadingAge National Home Health Network here.

Contact: Meg Everett, meverett@leadingageny.org, 518-867-8871