Home health final rule: CMS offers surprise rate increase for second year

After pledging to cut home health payment rates in 2024, CMS again provided a modest payment increase in the 2024 Home Health Prospective Payment System (HHPPS) final rule, released late on November 1.

 

Nationally, home health payments will increase by 0.80% in the aggregate, or an increase of $140 million, according to the rule, which also finalized plans around new HHQRP items, updates to HHVBP measures and the creation of the Hospice Special Focus Program.

 

The payment rate includes a permanent 2.89% reduction in payments, half of the total 5.78% reduction that CMS estimates would be required to address behavioral changes by agencies after the rollout of PDGM.

 

This is a bit of welcome news as agencies and industry leaders were bracing for the full payment cut, significantly impacting the ability for some agencies to operate.

 

That is combined with a 3.00% update percentage to account for increased costs, and a 0.40 % increase to reflect the effects of an updated FDL to reach the 0.80%.

 

CMS reiterated it expects to claw back more than $3.4 billion in the next few years to account for what it sees as overpayments from 2020 through 2022. That number is likely to increase with half of the permanent adjustment left out of the rule.

 

 

The Home Health Quality Reporting Program (HHQRP) will include two new items, beginning in 2025.

 

The final rule includes the new Discharge Function Score (DC Function), which will replace Application of Functional Assessment/Care Plan in the HHQRP. The DC Function measure will be based on GG items in the OASIS assessment.

 

CMS is also adding the measure COVID-19 Vaccine: Percent of Patients Who Are Up to Date, with public reporting expected to begin in January 2026, or as soon as technically feasible.

 

CMS finalized the public reporting of the two existing HHQRP measures for Transfer of Health Information (TOH) that separately report whether the agency provided information at discharge to the provider and the patient.

 

The TOH public reporting, beginning in 2025, will be based on four rolling quarters, initially using discharges from April 1, 2023, through March 31, 2024.

 

 

With the upcoming changes in the HHQRP, CMS is also advancing significant changes to the measure set for the Home Health Value-Based Purchasing (HHVBP) model, beginning in 2025. 

 

As finalized, “Change in Mobility” and “Change in Self-Care” will be removed from the OASIS-based measures for HHVBP and will be replaced with the new DC Function measure.

 

“Discharge to Community” will be removed as an OASIS-based measure and will be replaced with discharge information from the claim.

 

CMS noted in the proposed rule that the shift to the claims-based measure expands the data used from one year to two years. It also aligns risk-adjustment, exclusions and measure intent with other post-acute settings.

 

The rule also replaces the claims-based “Acute Care Hospitalizations” and “Emergency Department Use Without Hospitalization” with the already collected and publicly reported “Potentially Preventable Hospitalization” (PPH) measure.

 

And the final rule adjusts the baseline year for HHVBP measures from 2022 to 2023 starting with the 2025 performance year.

 

 

The rule also finalizes the Hospice Special Focus Program (SFP), which looks to target low-performing hospices for additional surveys.

These agencies will be expected to address deficiencies or potentially face removal from the Medicare system.

 

As proposed in June, the SFP has been criticized by industry leaders because of metrics that would seem to disproportionately lump larger hospices into the SFP program. CMS noted in its response that it is “open to continued discussions with interested parties and will make potential refinements in the future to these policies, as determined necessary.”

 

CMS expects to use hospice survey results, Hospice Care Index (HCI) scores and CAHPS Hospice Survey data, with SFP participants pulled from the 10% of providers with the worst total score.

 

The final rule also includes the Informal Dispute Resolution (IDR) process for hospices. Similar to an existing program in home health, the IDR will allow hospices a process to refute condition-level deficiencies during surveys. It’s been seen as an important step as hospice surveys are expected to increase in 2024.