CMS estimates that 2023 home health payments would decrease in the aggregate by 4.2%, or an $810 million reduction in payments compared to 2022.
CMS released its payment projection in the 2023 proposed rule for the Home Health Prospective Payment System Rate Update on Friday, June 17, 2022.
According to CMS, this decrease reflects the effects of:
  • A proposed 2.9% home health payment update percentage ($560 million increase).
  • An estimated 6.9% decrease that reflects the effects of the proposed prospective, permanent behavioral assumption adjustment of -7.69% ($1.33 billion decrease).
  • An estimated 0.2% decrease that reflects the effects of a proposed update to the fixed-dollar loss ratio (FDL) used in determining outlier payments ($40 million decrease).
“We are very disappointed in the CMS proposed rule issued today," said William A. Dombi, president of the National Association for Home Care & Hospice, in a statement Friday. "The stability of home health care is at risk as a consequence of CMS proposing the application a fatally flawed methodology for assessing whether the PDGM payment model led to budget neutral spending in 2020. That has been made clear to CMS in the 2021 rulemaking and in multiple discussions since. With significantly rising costs for staff, transportation, and more, home health agencies across the country cannot withstand the impact of the proposed rate cut."
Analysis has shown PDGM underpaid home health agencies, Dombi said. "We will be taking all steps to protect the home health benefit as this proposed rule advances and have fully prepared for Congressional action and more."
HHQRP reporting expanded
For the Home Health Quality Reporting Program (HHQRP), CMS also is proposing to end the suspension of non-Medicare / non-Medicaid data for patients. Agencies would be required to submit all-payer OASIS data for purposes of the HHQRP beginning with 2025 quailty reporting program year.
According to the rule, the total costs beginning in the 2025 program year is an estimated $267,157,680.30 based upon the collection of OASIS data on all patients, regardless of payer.
Shifting the HHVBP baseline year
With Home Health Value-Based Purchasing (HHVBP) expected to begin in 2023, CMS also announced plans to shift the baseline year from 2019 to 2022.
Next year will be the first “performance year” for the national rollout of the HHVBP model, with agencies competing for an up to 5% increase or decrease in payments based on key claims, OASIS and patient survey measures.
CMS said in the proposed rule that it was making the change on the baseline year to measure competing agencies’ performance on benchmarks and achievement thresholds that “are more current.”