CMS proposes substantial Medicare home health cut

Submitted by tim on Wed, 07/17/2024 - 14:24

Vermont Business Magazine In late June, The Centers for Medicare and Medicaid Services (CMS) issued the Proposed Rule regarding Medicare home health services payment rates for calendar year (CY) 2025.

The proposed rule contains a substantial cut to Medicare rates for the home health services many Vermonters depend on, creating new fiscal challenges for providers during an already difficult time.

For 2025, the proposed rule permanently reduces the standard Medicare payment rate by 4.067%. Last year, CMS ultimately implemented half of the 5.653% cut that it initially proposed. This year’s cut includes the remaining 2.89% of the 2024 proposal, along with an additional cut to reflect claims paid through 2023.

CMS is also proposing a net 2.5% inflation update (3.0% Market Basket Index - 0.5% Productivity Adjustment). Unfortunately, CMS still refuses to account for a forecasting error in CY2022 and 2023 rates where the inflation update fell far short of reality by a cumulative 5.2%. This error will permanently impact base rates if it is not corrected.

Furthermore, there is still the risk of a substantial clawback – over $4 billion nationally. A clawback of any magnitude, especially one this large, presents a serious concern for access to the critical home health services Vermonters across the state depend on.

We are working with our national association, the National Association for Home Care and Hospice (NAHC), to respond to these unjustified cuts in Medicare home health rates.

The full proposed rule, which also contains other regulatory provisions, can be found in the Federal Register.

As always, we will keep you updated on any new developments.