Home health agencies get half a percent pay increase
Providers have gotten a nearly 9% permanent cut to home health payment since 2023, says LeadingAge.
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Home Health agencies get a 0.5% payment increase in the 2025 Home Health Prospective Payment System final rule.
CMS estimates that Medicare payments to home health agencies in 2025 would increase in the aggregate by 0.5%, or $85 million, compared to 2024.
This rule also updates the intravenous immune globulin (IVIG) items and services' payment rate for Durable Medical Equipment suppliers.
For 2023 and 2024, CMS previously applied a 3.925% reduction and a 2.890% reduction, respectively, which were half of the estimated required permanent adjustments.
Katie Smith Sloan, president and CEO of LeadingAge said, "Though the final payment rule released today is a net aggregate payment increase of 0.5%, or $85 million, this number must be put into context. Although CMS has spread out the baseline cuts, the rule nonetheless finalizes a -1.975% permanent projected adjustment. This brings us to a nearly 9% permanent cut to home health payment since 2023. At the same time, a $4.5 billion temporary adjustment looms."
WHY THIS MATTERS
The payment especially puts at risk nonprofit, mission-driven agencies, Sloan said.
"We are already seeing provider closures," Sloan said. "This is simply unsustainable."
Despite CMS warnings of future cuts, due to a competitive labor market, many providers have no further ability to tighten their belts, she said.
"Simply put, without a change in course by Congress and by CMS, access to care will continue to decline" Sloan said.
The finalization of Conditions of Participation will not solve the problem of access to care but puts additional administrative burdens on home health agencies, she said.
"LeadingAge has, for each of the past three years, shared with CMS our concerns about referral rejection rates and we strongly disagree with CMS' position that this purported lack of transparency from home health agencies is the root cause of the delay in access."
THE LARGER TREND
This rule finalizes a permanent prospective adjustment of -1.975% (half of the calculated permanent adjustment of -3.95%) to the 2025 home health payment rate to account for the impact of implementing the Patient-Driven Groupings Model (PDGM).
This required adjustment accounts for differences between assumed behavior changes and actual behavior changes on estimated aggregate expenditures, due to the 2020 implementation of the Patient-Driven Groupings Model and the change to a 30-day unit of payment.
On January 1, 2020, CMS implemented the home health PDGM and a 30-day unit of payment, as required by a section of the Social Security Act, as amended by the Bipartisan Budget Act of 2018. The PDGM better aligns payments with patient care needs, especially for clinically complex individuals, CMS said.
