CMS Finalizes a $140M Increase to Medicare Home Health Payment Rates

After initially proposing a decrease, CMS has finalized a 0.8 percent increase in Medicare payment rates for home health agencies in 2024, boosting reimbursement by $140 million compared to 2023.

The payment increase reflects a 3.0 percent market basket update with a 0.3 percent reduction for productivity and a 0.4 percent increase for the fixed-dollar loss ratio used in determining outlier payments.

In addition, the update includes a 2.6 percent decrease for the behavioral adjustment, which aims to achieve budget-neutral implementation of the Patient-Driven Groupings Model (PDGM). This reduction is half of what CMS proposed; the agency plans to apply the remaining adjustment in future years.

In the CY 2023 Home Health Prospective Payment System (HH PPS) final rule, CMS finalized a permanent PDGM adjustment of -7.85 percent, with plans to implement half of that. For the CY 2024 HH PPS final rule, the agency determined that Medicare paid more under the new system than it would have under the old system, leading to the revised adjustment of -5.779 percent.

While the 2.6 percent behavioral assumption adjustment includes all payments, the -2.890 percent adjustment only applies to national, standardized 30-day period payments, the rule noted.

In the CY 2024 HH PPS Rate Update proposed rule, the agency had proposed a 2.2 percent or $375 million cut to Medicare home health payments.

CMS finalized all its proposals related to the HH Quality Reporting Program, including adopting the following two quality measures:

• COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date (Patient/Resident COVID-19 Vaccine) measure to the HH QRP beginning with the CY 2025 HH QRP
• Functional Discharge Score (DC Function) measure to the HH QRP beginning with the CY 2025 HH QRP

The agency also finalized the public report of four previously adopted measures:

• Discharge Function
• Transfer of Health (TOH) Information to the Provider—Post-Acute Care (PAC) Measure (TOH-Provider)
• Transfer of Health (TOH) Information to the Patient—Post-Acute Care (PAC) Measure (TOH-Patient)
• COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date

The final rule replaced five quality measures with three updated measures in the HH Value-Based Purchasing (HHVBP) model, including the Discharge Function Score measure and the claims-based Discharge to Community-Post Acute Care (PAC) Measure for Home Health Agencies.

CMS also finalized an opportunity for participants to request a reconsideration of the annual Total Performance Score and payment adjustment under the HHVBP model.

Other final policies are related to Home Intravenous Immune Globulin (IVIG) items and services, Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) policy issues, and the Hospice Special Focus Program (SFP) and Informal Dispute Resolution (IDR).

The full CY 2024 HH PPS final rule can be found here.