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CMS Proposes CY 2025 Home Health Rule

(July 2, 2024) The Centers for Medicare and Medicaid Services (CMS) has proposed the Calendar Year (CY) 2025 Payment Rule for home health agencies providing Medicare services. The rule can be found here and will be published in the Federal Register on July 3rd. Comments on the rule must be submitted by Aug. 26th.

The overall economic impact related to the changes in payments under the Home Health Prospective Payment System (HH PPS) for CY 2025 is estimated to be -$280 million (-1.7 percent). The proposed rule includes a 2.5 percent market-basket adjustment, which is offset by another 3.6 percent decrease related to permanent behavioral assumptions adjustment to all payments. The rule also includes adjustments to the wage index based on the 2020 census as well as four new items for the Outcome and Assessment Information Set (OASIS). CMS is also proposing changes to the Conditions of Participation (CoP) which would require agencies to develop, consistently apply, and maintain an acceptance to service policy.

The proposed rule is problematic for certified home health agencies (CHHAs) as they struggle to provide competitive wages to staff and try to address increasing demand amid challenging payor practices. The rate reductions also account for changes made back in 2020 during the transition to the Patient-Driven Groupings Model (PDGM) that require CMS to make permanent and temporary adjustments to rates to ensure that the model is budget-neutral based on the 2019 payment model.

CMS has also updated the level of alleged overpayments to CHHAs reflecting claims during the Public Health Emergency from $3.5 billion to almost $4.45 billion. As in 2023 and 2024, CMS does not plan on collecting any of these funds in 2025.

Both LeadingAge National and LeadingAge NY staff will be reviewing the whole rule and will provide more details on the proposed changes in the coming days. Comments are due Aug. 26th, and LeadingAge will be working with members to respond.

Additional highlights include:

  • A market-basket increase of 2.50 percent based on an annual inflation update of 3.0 percent, reduced by a 0.5 percent productivity adjustment.
  • A decrease in the 30-day payment rate from $2,038.15 to $2,008.12 after application of the PDGM budget neutrality adjustment, market-basket update, a wage-index budget 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 (SN): $172.42; Physical Therapy (PT): $188.46; Speech Language Pathology (SLP): $204.86; Occupational Therapy (OT): $189.75; Medical Social Work: $276.37; and Home Health Aide: $78.07.
  • An updated CY 2025 Wage Index. 
  • A Wage Index proposal to adopt new statistical area geographic delineations, which revise the existing core-based statistical areas (CBSAs) based on data collected during the 2020 Decennial Census. This proposed change to the geographic delineations will have impacts on the payment rates hospices receive, based on their locations. CHHAs affected by the change to their geographic wage index will be able to apply a 5 percent cap on any decrease to the wage index from the prior year.
  • A revision to the LUPA add-on for LUPA-only episodes for each qualifying discipline of service (SN, PT, OT, and SLP). 
  • A requirement for CHHAs to collect four new items as standardized patient assessment data elements under the Social Determinants of Health (SDOH) category using the OASIS: one item for living situation, two items for food, and one item for utilities. CMS also proposes to modify the transportation item. CHHAs would be required to report these new assessment items beginning with patients admitted on Jan. 1, 2027, for purposes of the CY 2027 HH Quality Reporting Program (QRP) program year.
  • A change from data collection beginning with the OASIS discharge time point to using the start of care (SOC) time point. The SOC is the first assessment that can be submitted for a non-Medicare/non-Medicaid patient, either on or after Jan. 1, 2025 for the phase-in (voluntary) period or on or after July 1, 2025 for the mandatory period.
  • A new standard at §484.105(d) that would require CHHAs to develop, implement, and maintain an acceptance to service policy that is applied consistently to each prospective patient. The policy must address, at minimum, the following criteria related to the CHHA’s capacity to provide patient care: the anticipated needs of the referred prospective patient, the CHHA’s case load and case mix, the CHHA’s staffing levels, and the skills and competencies of the CHHA staff.

Home health agencies should register to attend the next LeadingAge National Home Health Member Network meeting on July 2nd at 2 p.m. ET to learn more. More follow-up and feedback will be an option again at the Home Health Member Network meeting on Aug. 6th at 2 p.m. ET. LeadingAge NY will provide LeadingAge National's slides on the overview when they become available.

Providers should also attend the next CMS Home Health, Hospice, and Durable Medical Equipment (DME) Open Door Forum on July 9th at 2 p.m. ET. Providers can register in advance for this webinar here.

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