by Jill Olson, Executive Director of VNAs of Vermont Last week, the Centers for Medicare and Medicaid Services released the final home health Medicare payment rule for calendar year 2023. The news is alarming.
The rule temporarily blunts the immediate impact of the original proposal for a “permanent adjustment” (cut) but leaves it intact. A plan to claw back payments dating back to January 1, 2020 (a “temporary adjustment”) is still being considered.
Put another way, at a time when home health and hospice agencies are responding to double digit inflation for wages, benefits and transportation, CMS is proposing to cut rates and keep Medicare spending on home health services nearly flat. The new rule represents only a 0.7% increase in aggregate spending.
Specifically, the proposed rule called for a devastating permanent 7.65% reduction to base Medicare payment rates. The final rule increases the cut to 7.87% and implements half the cut in 2023 (3.925%) and the full cut in 2024. Net home health payments are based on a number of factors including the base rate, an inflation factor (which increased in the final rule) and a wage index among other elements. When taken together, the net impact in Vermont will be a 1.8% cut for rural agencies and a 1.2% cut for urban agencies on January 1, 2023.
“This rule offers the tactic of relief for CY 2023, but this short-term acknowledgment that home health cannot withstand devastating cuts does nothing to address the long-term impacts . . . on the stability of the Medicare home health program and services to senior citizens” said Joanne Cunningham, CEO of the Partnership for Quality Home Healthcare.
Home health agencies across the country have urged their congressional delegations to step in and support the Preserving Access to Home Health Act. Vermont Senator Patrick Leahy is a co-sponsor of the Senate version of the bill and Congressman Peter Welch is a co-sponsor of the House version.
In response to the release of the final rule, William A. Dombi, President of the National Association for Home Care & Hospice said, “We now turn to Congress to correct what CMS has done and prevent the impending harm to the 3.2 million highly vulnerable home health patients that depend on this essential Medicare benefit annually. Even with the limited phase-in of the rate cut, with significantly rising costs for staff, transportation, and more, home health agencies across the country cannot withstand the impact of rate cuts.