CMS issues final payment rules for home health, infusion and ESRD

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On Monday, the Centers for Medicare and Medicaid Services issued the 2023 Home Health Prospective Payment System Rate Update final rule, which updates Medicare payment policies and rates for home health agencies.

CMS also released payments in final rules for home infusion and for end-stage renal disease.

HOME HEALTH AGENCIES

CMS estimates that Medicare payments to home health agencies in 2023 will increase in the aggregate by 0.7%, or $125 million, compared with 2022.

This increase reflects the effects of the 4% home health payment update percentage ($725 million increase), an estimated 3.5% decrease that reflects the effects of the prospective permanent behavioral assumption adjustment of -3.925% ($635 million decrease) that is being phased in, and an estimated 0.2% increase that reflects the effects of an update to the fixed-dollar loss ratio (FDL) used in determining outlier payments ($35 million increase). 

The overall impact of the -3.925% permanent behavioral assumption adjustment is -3.5%, as the permanent adjustment is only made to the 30-day payment rate and not the Low Utilization Payment Adjustment per visit payment rates, CMS said.

To achieve the policy goal of increased predictability in home health payments, while aligning with the FY 2023 Inpatient Prospective Payment System final rule and other rules, this rule finalizes a permanent, budget-neutral 5% cap on negative wage index changes (regardless of the underlying reason for the decrease).

CMS is finalizing a methodology to determine the impact of differences of assumed and actual behavior changes on aggregate expenditures, as well as a permanent prospective payment adjustment to the home health 30-day period payment rate to account for any increases or decreases in aggregate expenditures. 

The rule also includes a discussion of the comments received on the future collection of data regarding the use of telecommunications technology during a 30-day home health period of care on home health claims, for which CMS will begin collecting data voluntarily Jan. 1, 2023, and will then require on a mandatory basis on July 1, 2023. 

Additionally, this rule finalizes changes to the Home Health Quality Reporting Program requirements; finalizes changes to the Expanded Home Health Value-Based Purchasing (HHVBP) Model; and summarizes the input received on the health equity request for information. 

This rule also discusses the comments received on the best approach to implement the statutorily required temporary payment adjustment for CYs 2020 and 2021, and those comments will be considered for future rulemaking.

The statute requires CMS to determine annually the impact of differences between assumed behavior changes and actual behavior changes on estimated aggregate expenditures, beginning with CY 2020 and ending with CY 2026. 

Using the finalized methodology and updated claims data for the final rule, CMS determined that Medicare paid more under the new system than it would have under the old system and would have to make a -7.85% permanent adjustment to the 30-day payment rate in CY 2023 (as compared with -7.69% adjustment in the proposed rule). However, to mitigate such a large decrease in home health payments in a single year, CMS is finalizing to phase in the permanent adjustment by reducing it by half for CY 2023. 

The remaining permanent adjustment, along with any other potential adjustments needed to the base payment rate to account for behavior change based on data analysis, will be proposed in future rulemaking.

HOME INFUSION

The final home infusion therapy payment rate update for CY 2023 is 8.7%. 

The single payment amounts are also adjusted in a budget-neutral manner using standardization factors for geographic area wage differences using the geographic adjustment factors. 

The Consumer Price Index for all urban consumers (CPI–U) for the 12-month period ending with June of the preceding year reduced by the productivity adjustment for CY 2023 is 9.1% and the corresponding productivity adjustment is a reduction of 0.4%.

END-STAGE RENAL DISEASE

Medicare expects to pay $7.9 billion to approximately 7,800 ESRD facilities for furnishing renal dialysis services. 

The base rate is $265.57, which is an increase of $7.67 from the current base rate of $257.90. This amount reflects a productivity-adjusted market basket increase of 3% and application of the wage index budget-neutrality adjustment factor (0.999730).

CMS projects that the updates for CY 2023 will increase the total payments to all ESRD facilities by 3.1% compared with CY 2022. For hospital-based ESRD facilities, CMS projects an increase in total payments of 3.1%, and for freestanding facilities, CMS projects an increase in total payments of 3%.

This rule also updates the Acute Kidney Injury (AKI) dialysis payment rate for renal dialysis services furnished by ESRD facilities for calendar year (CY) 2023. In addition, the rule updates requirements for the ESRD Quality Incentive Program (QIP) and summarizes comments received in response to requests for information on topics that are relevant to the ESRD QIP. CMS is finalizing refinements to the ESRD Treatment Choices Model in this rule.

CMS is finalizing our proposal to rebase and revise the ESRDB market basket to a 2020 base year using data from the Medicare Cost Report and other publicly available data. The final CY 2023 labor-related share is 55.2% based on the 2020-based ESRDB market basket weights.

Beginning CY 2023, CMS is increasing the wage index floor from 0.5 to 0.6. 

Additionally, CMS is establishing a permanent policy to apply a permanent 5% cap on decreases in the ESRD PPS wage index beginning CY 2023. Specifically, CMS is finalizing its proposal that an ESRD facility's wage index for CY 2023 will not be less than 95% of its final wage index for CY 2022, and that for subsequent years, a facility's wage index will not be less than 95% of its wage index calculated in the prior CY.

Twitter: @SusanJMorse
Email the writer: SMorse@himss.org