Home Health Prospective Payment System Proposed Rule for CY 2024

Regulatory Advisory

July 26, 2023

On June 30, the Centers for Medicare & Medicaid Services (CMS) issued its calendar year (CY) 2024 proposed rule for the home health (HH) prospective payment system (PPS). Comments are due Aug. 29, and a final rule is expected around Nov. 1. New policies will generally be effective Jan. 1, 2024.

Key Highlights

The proposed HH rule would:

  • Reduce net HH payments by an estimated -2.2%, or $375 million, after all policy changes, compared to estimated CY 2023 payments. This reduction includes:
    • A negative 5.65% permanent behavioral adjustment (applied to the 30-day episode payment rate only);
    • A 3.0% market basket update, reduced by a negative 0.3% productivity adjustment; and
    • An estimated 0.2% increase in payments due to changes in outlier payments.
  • Rebase and revise the HH market basket using 2021 claims data;
  • Adopt two new measures to the Quality Reporting Program.
  • Replace five measures in the Value-based Purchasing program with three new measures, and change the weights of the individual measures in scoring.

The rule also includes a Request for Information on the use of HH aides.

AHA Take

AHA remains very troubled by the magnitude of the budget neutrality cuts CMS is proposing as part of the implementation of the Patient-Driven Groupings Model (PDGM). The agency has proposed a permanent reduction of negative 5.65% to the 30-day episode payment rate for CY 2024 and predicts it will need to apply additional temporary reductions in the future to recoup past overpayments. Further, the proposed net market basket update of 2.7% continues the failure to account for inflationary pressures facing providers. Overall, AHA is concerned about how the net impact of these proposals may affect beneficiary access to care, as well as impede the ability of hospitals to discharge patients in need of HH care in a timely fashion.

What You Can Do

  • Share the attached summary with your senior management team to examine the impact these payment changes would have on your organization in CY 2024.
  • Submit a comment letter on the proposed rule to CMS by Aug. 29 explaining the rule’s impact on your patients, staff, facility and local health care partners.

Read the complete Regulatory Advisory.

Regulatory Advisory: Home Health Prospective Payment System Proposed Rule for CY 2024 page 1.