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The Final Rule for Home Health Prospective Payment System for 2024 - Including a 0.8% Payment Increase and More
November 2023
The Centers for Medicare & Medicaid Services (CMS) released its CY 2024 home health final payment rule on Wednesday, November 1, 2023. This rule brings a projected 0.8% increase, or $140 million, in home health payments compared to CY 2023.
This increase is the result of several effects. Firstly, the effects of the CY 2024 home health payment update percentage of 3.0%, contributing to a significant $525 million increase in home health payments. However, this increase is balanced by an estimated 2.6% decrease, which reflects the effects of the permanent behavioral assumption adjustment, resulting in a decrease of $455 million. Additionally, an estimated 0.4% increase, equivalent to $70 million, is due to an update to the fixed-dollar loss ratio used in determining outlier payments. Therefore, these adjustments lead to a moderate overall increase in payment to home health agencies in CY 2024.
CMS is also finalizing a -2.890 percent permanent adjustment to the CY 2024 home health 30-day payment rate to address differences in the aggregate expenditures as a result of the enforcement of the Patient-Driven Groupings Model (PDGM) and the 30-day payment system as required by the Bipartisan Budget Act of 2018. The -2.890 percent permanent adjustment is half the total permanent adjustment of -5.779 percent. Due to CMS’s decision to finalize only half of the initially proposed permanent adjustment, Medicare payments to Home Health Agencies in 2024 will experience a 0.8 percent increase instead of the 2.2 percent decrease that was initially proposed.
Furthermore, CMS is finalizing several proposals to revise various aspects of the home healthcare system. This includes updates to rebase and revise the home health market basket, used to update the Home Health Prospective Payment System (HH PPS). The proposal is to adopt a 2021-based model with adjustments to the market basket cost weights and price proxies. In addition, the CY 2024 labor-related share is revised and being implemented in a budget-neutral manner. Moreover, CMS is finalizing its proposal to establish legal guidelines for utilizing disposable devices in negative pressure wound therapy (NPWT) for patients under home health care plans. The new regulation mandates a separate payment for NPWT devices under the Consolidated Appropriations Act (CAA), 2023, starting January 1, 2024. CMS is also finalizing its proposal to recalibrate the case-mix weights and Low Utilization Payment Adjustment (LUPA) thresholds using data from CY 2022. This adjustment aims to ensure more precise compensation for the kinds of patients that home health agencies cater to. Furthermore, CMS sought public input on enhancing access to home health aide services. The received feedback will steer policy-making procedures and potentially aid in improving policy development, overcoming challenges, and promoting collaboration within the home health benefit for future regulatory updates.
In the home health quality reporting program, CMS is finalizing new measures related to the COVID-19 Vaccine and Functional Discharge Score, starting from CY 2025. The COVID-19 Vaccine measure aligns with current CDC guidelines and commitment to promoting vaccine uptake. Some measures are removed, including the Application of a Functional Assessment/Care Plan and two OASIS items that are no longer necessary for collection.
Proposals for changes to the Expanded Home Health Value-Based Purchasing (HHVBP) Model are also being finalized. This includes replacing specific measures such as the two Total Normalized Composite measures and the OASIS-based Discharge to Community (DTC) measure. CMS is also completing the appeals process for the annual Total Performance Score (TPS) and payment adjustment. An update on health equity is also included to reaffirm CMS's commitment to incorporating stakeholder input and monitoring equity policies across various CMS programs.
CMS is implementing regulations to provide permanent coverage and payment for home administration of Intravenous Immune Globulin (IVIG) items and services for patients with a diagnosed primary immune deficiency disease (PIDD) starting January 1, 2024, as mandated by CAA 2023. The CAA 2023 also establishes a Medicare Part B benefit for compression garments and other items used to treat lymphedema.
CMS also aims to safeguard taxpayer dollars by implementing policies and provisions. To address concerns regarding unnecessary or excessive shipments of Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS), CMS has implemented policies requiring suppliers to contact beneficiaries before dispensing refills. Moreover, suppliers must provide documentation confirming the beneficiary's need for the refill within 30 days before the end of the current supply. To address hospice fraud and abuse, hospice enrollment regulations are implemented. These include subjecting hospices to comprehensive screening, expanding ownership provisions, and clarifying the definition of “Managing Employee.” Furthermore, CMS is implementing additional provider enrollment provisions to protect the Trust Funds and Medicare beneficiaries.
The final rule also includes a Hospice Special Focus Program (SFP) and Informal Dispute Resolution (IDR). The SFP aims to enhance regulatory oversight for poor-performing hospices to address concerns regarding the risk of poor-quality care to hospice beneficiaries. Whereas, the IDR process would allow hospice providers to contest identified deficiencies, aligning with the IDR for home health agencies.
