Key Updates in the CY 2025 Home Health Prospective Payment System Final Rule

On November 1, 2024, the Centers for Medicare & Medicaid Services (CMS) released the final rule for the CY 2025 Home Health Prospective Payment System (HH PPS). The rule outlines crucial updates to Medicare payment policies and rates for Home Health Agencies (HHAs), alongside adjustments for intravenous immune globulin (IVIG) payment rates for Durable Medical Equipment (DME) suppliers. According to CMS, the new policies will increase Medicare payments to HHAs by an estimated 0.5% or $85 million in CY 2025 compared to CY 2024.

CY 2025 Payment Adjustments for Home Health Agencies

The final rule implements several updates to Medicare payment rates for home health services in CY 2025. These include:

• Home Health Payment Update:

A 2.7% payment increase ($445 million).

• PDGM and Behavior Adjustment:

A -1.975% permanent reduction, which accounts for discrepancies between assumed and actual behavior changes under the Patient-Driven Groupings Model (PDGM).

• Fixed-Dollar Loss (FDL) Adjustment:

A -0.4% decrease reflecting the updated FDL ($65 million decrease).
This results in an overall payment increase of 0.5% for HHAs, or $85 million in additional funding compared to 2024.

Crosswalk for Mapping OASIS-D to The Equivalent OASIS-E Data Elements

CMS is finalizing a crosswalk to map OASIS-E items back to the OASIS-D. The OASIS-D was the home health assessment instrument used under the previous 153-group system and for the first three years of the PDGM, while OASIS-E was approved in November 2022 and became effective in January 2023. To maintain accurate payment determinations, CMS will impute responses for the three changed items from OASIS-D that have changed in the OASIS-E. In addition, the most recent Start of Care or Resumption of Care assessment are utilized for 13 items that no longer require follow-up visit responses.

Occupational Therapy (OT) and LUPA Add-On Factors

CMS has finalized an OT LUPA add-on factor of 1.7238, which will be applied when occupational therapy is the first skilled visit in a LUPA episode. This decision aims to ensure equitable compensation for occupational therapy services.Additionally, CMS is finalizing the LUPA add-on factors for skilled nursing (SN), physical therapy (PT), and speech-language pathology (SLP) services, based on recent claims data through CY 2023. The SN LUPA add-on factor is set at 1.7200, the PT LUPA add-on factor at 1.6225, and the SLP LUPA add-on factor at 1.6696.

Recalibrated PDGM Case-Mix Weights

For CY 2025, case-mix weights and LUPA thresholds have been updated using CY 2023 data for greater accuracy.

Wage Index Update

CMS has updated the home health wage index to reflect the most current labor market delineations from the 2020 Decennial Census. By using the latest data, CMS aims to more accurately reflect regional labor market conditions and ensure that payments are adjusted for geographic cost differences.

Home Health Agency Conditions of Participation (CoPs) Updates

CMS is finalizing updates to the HHA CoPs to reduce care delays and ensure patients select the most appropriate HHA. HHAs must develop, implement, and annually review a consistent patient acceptance policy that considers the patient’s needs, the HHA’s caseload, staffing, and staff competencies. CMS also requires HHAs to publicly share accurate service information, including any limitations on specialty services, duration, or frequency, and to update this information annually or whenever services change.

Home Health Quality Reporting Program (QRP) Updates

CMS is finalizing four new social determinants of health (SDOH) items and modifying one item, beginning with the CY 2027 HH QRP via the OASIS. The new items include a living situation item, two food items, and one utility item. Additionally, the transportation item will also be updated and all-payer data collection will now start at the OASIS start of care timepoint, rather than at discharge.

Expanded Home Health Value-Based Purchasing (HHVBP) Model

CMS has reviewed feedback on future performance measures for the expanded HHVBP Model, with a focus on filling measurement gaps. Proposed measures include function measures for activities like bathing and dressing, as well as potential future additions such as the Medicare Spending per Beneficiary measure and measures on family caregiver status and claim-based falls with major injuries.Additionally, CMS reaffirms its commitment to advancing health equity in the HHVBP Model, incorporating stakeholder input and monitoring health equity policies across CMS initiatives.

Long-Term Care Facility Reporting on Acute Respiratory Illness

CMS is finalizing a new data reporting standard for LTC facilities, starting January 1, 2025, to address a wider range of acute respiratory illnesses, including COVID-19, influenza, and RSV. The new reporting requirements replace the current COVID-19 standards set to expire in December 2024. Facilities will report data on the census, resident vaccination status, confirmed cases of COVID-19, influenza, and RSV (by vaccination status), and hospitalized residents with these conditions. Additionally, during a national public health emergency for respiratory illnesses, facilities may be required to report more frequently and provide additional data on infections, supplies, staffing, and therapeutics.

Medicare Provider Enrollment Updates

CMS is adding providers and suppliers reactivating their Medicare billing privileges in the categories of new providers and suppliers subject to a provisional period of enhanced oversight (PPEO), which can last between 30 days and one year. This is designed to prevent fraud and ensure compliance with Medicare regulations.

Conclusion

The CY 2025 Home Health Prospective Payment System Final Rule introduces several important updates aimed at improving payment accuracy, enhancing patient care, and advancing health equity. Home Health Agencies should carefully review these changes to ensure compliance and to optimize reimbursement for services rendered. Partnering with Cliniqon can help agencies stay aligned with the new rules and maximize reimbursement for services rendered. Additionally, as CMS continues to monitor these adjustments, Cliniqon is equipped to support agencies in adapting to future policy updates.