AHA Opposes Proposed Payment Cuts for Home Health Providers

The American Hospital Association (AHA) is urging CMS to reconsider the payment cuts included in the CY 2024 Home Health Prospective Payment System (PPS) proposed rule.

Specifically, the trade organization expressed concerns about the proposed budget neutrality adjustment related to the Patient-Driven Groupings Model (PDGM) and the proposed market basket update.

The neutrality adjustment includes a 5.653 percent cut to the standardized 30-day period payment rate in CY 2024. AHA said this method would lower overall payment levels to home health providers relative to the prior payment system. The cuts could also exacerbate capacity issues.

The reduction reflects half of the -7.85 percent permanent adjustment finalized for overpayments in CY 2020 and 2021. The agency also proposed an additional permanent adjustment to account for estimated CY 2022 overspending, bringing the total cut to 5.653 percent.

AHA has asked CMS to revise the methodology to better account for care delivery and payment changes stemming from the PDGM transition. The letter highlighted how budget neutrality adjustments hurt access to care, worsen labor shortages, and increase financial challenges for home health providers.

The home health PPS proposed rule included a market basket update of 2.7 percent. AHA said this increase is inadequate as it fails to account for missed forecasts from recent years and does not consider the current inflationary environment. The organization urged CMS to revise the market basket update—a particularly important move if CMS maintains its budget neutrality adjustment plan.

“Due to the consistent under-forecasting of the HH market basket, the unusual economic circumstances, and the reductions in payment due to PDGM implementation, AHA appeals to CMS to deviate from its typical methodology and apply a more robust update to the HH market basket for CY 2024,” the letter stated.

CMS also proposed changes to the Home Health Quality Reporting Program (QRP), including adopting two new measures. The first measure estimates the share of home health patients who meet or exceed an expected discharge score during the reporting period.

CMS finalized this measure for inpatient rehabilitation facilities, skilled nursing facilities, and long-term care hospitals. However, AHA raised concerns about whether the measure will have the same success in home health settings, given the different patient populations. The organization asked CMS to wait until the measure has undergone endorsement review by a consensus-based entity and is confirmed to benefit patients and providers before adopting it in the home health QRP.

The second measure reports the share of stays in which home health patients are up to date with their COVID-19 vaccinations per the latest CDC guidance.

While AHA supports vaccination among healthcare providers and communities, it said the measure has not been tested for validity and reliability. In addition, AHA noted it is unclear if the measure is the best way to encourage vaccination. Therefore, the organization does not support the adoption of the measure.

AHA also opposed adopting the discharge function score measure in the Home Health Value-Based Purchasing Program until further review.