Home Health Medicare Rates
Several weeks ago, companion bills were proposed in the US House and Senate that would stop the Center for Medicare and Medicaid Services (CMS) from implementing a devastating rate cut on January 1, 2023. Known as the Preserving Access to Home Health Act of 2022, S. 4605 and H. R. 5067 would delay a permanent cut to Medicare home health rates until 2024 and delay a temporary cut until 2026. These bills buy some time for an agreement to be reached about the right approach to home health payments.
As we reported in our July newsletter, CMS has proposed a substantial cut to Medicare home health services that translates to 6.9 percent for Vermont’s rural agencies and 6.3 percent for Vermont’s “urban” agencies. Our partners at the National Association for Home Care and Hospice (NAHC) estimate that those cuts will total more than $2.8 million next year. Using current utilization data, the VNAs of Vermont estimates that the cut will amount to more than $3.2 million.
CMS has also signaled its intent to recoup Medicare payments already made to home health agencies in 2020, 2021 and 2022. Our national partners estimate that the claw-back could amount to as much as $11 million.
Rural areas are expected to be especially hard hit by CMS’s proposal. That’s certainly the case for Vermont. Our national partners estimate that if the cut moves ahead, 80 percent of Vermont agencies will be in the red.
It’s impossible to overstate the seriousness of the situation. Home health services are essential for preventing unnecessary hospitalizations and short-term skilled nursing home stays. The VNAs of Vermont is in close touch with Vermont’s Congressional delegation about the situation and last month, we submitted comments to CMS urging the Biden Administration to reverse course.
Hospice Medicare Rates
The news about hospice payments is less bleak than the news about home health payments. CMS recently finalized a 3.8 percent hospice payment update for FY2023 under a new payment rule that goes into effect on October 1. In doing so, CMS acknowledged higher inflationary trends than in the proposed rule. The original proposal called for a 2.7 percent increase, which paled in comparison to the increased costs experienced by hospice providers.
In response to the proposed rule earlier this year, NAHC and other hospice stakeholders expressed serious concern that the proposed payment update of 2.7 percent was grossly inadequate against the dramatic increases in workforce and transportation costs experienced by hospices (and other providers) over recent months.
The rule also finalizes a proposal to impose a 5 percent cap on wage index losses from one year to the next to reduce large fluctuations in rates from one year to the next.
“While we believe the 3.8 percent update will be helpful in addressing the financial pressures hospices are experiencing, we have continuing concerns that it will not fully address current cost inflation and will seek support for further increases that would cover the increasing labor and other costs affecting hospice providers,” said NAHC President William A. Dombi, in response to the release of the rule.