July 2022
From the Executive Director
Grim News for Home Health Care

Late last month, the Centers for Medicare and Medicaid Services (CMS) issued its annual proposed Medicare home health payment rule for calendar year 2023. 

The news is grim. 

CMS is proposing a substantial cut to Medicare home health services effective on January 1, 2023. The VNAs of Vermont estimate that in Vermont, the proposed rule will amount to a 6.9 percent cut to rural home health agencies in Vermont compared to 2022 rates. Those few agencies in Vermont that are considered “urban” will see a 6.3 percent cut. 

Reacting to the announcement, William A. Dombi, President of the National Association for Home Care & Hospice, said, “We are extremely disappointed in the CMS proposed rule issued today. The stability of home health care is at risk . . . with significantly rising costs for staff, transportation, and more, home health agencies across the country cannot withstand the impact of the proposed rate cut.”
This news comes on top of other pressures, including the July 1, 2022 re-imposition of the 2% Medicare “sequestration” cut that was suspended for the COVID-19 pandemic. 
In developing the rate proposal, CMS is estimating an inflation rate of 2.9% that bears little relationship to the increased costs home health and hospice agencies are grappling with—particularly for wages and gas. 

CMS is also proposing a permanent “adjustment” (aka a cut) in response to the January 1, 2020 implementation of a new payment methodology. CMS is assuming that in response to the new model, agencies have adjusted their “behaviors” and are being overpaid compared to the 2019 model. Our national association and other partners believe CMS’ calculations are flawed. 

As I have said in this space before, home health and hospice agencies have long subsidized state underpayments for Medicaid services, including the Choices for Care program, with Medicare surpluses. A Medicare cut of this magnitude will decimate the capacity of home health and hospice agencies to support chronically underfunded state programs.

The VNAs of Vermont will work closely with our state and national partners to fight this devastating cut. 
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