Home Health PPS

Home Health Prospective Payment System Proposed Rule for CY 2023


On June 17, the Centers for Medicare & Medicaid Services (CMS) issued its calendar year (CY) 2023 proposed rule for the home health (HH) prospective payment system (PPS).

Key Highlights

The proposed rule would:

  • Reduce net HH payments by $810 million in CY 2023, relative to CY 2022.
  • Take steps toward the budget-neutral implementation of the Patient-driven Groupings Model (PDGM) — a multi-year process — through a 7.69% cut to the 30-day episode rate.
  • Implement a 0.2% high-cost outlier (HCO) cut.
  • Require submission of patient assessment data on all patients beginning Jan. 1, 2024.
  • Collect feedback on its strategies to improve measurement of disparities in health care outcomes.
  • Change the terminology and timeline for baseline years used to calculate HH performance in the Value-Based Purchasing (VBP) program.


While this rule includes no major changes to the structure of the HH PPS, we are very concerned about the unprecedented behavioral offset the agency proposes — 7.69% to the 30-day episode rate — which it states is necessary to achieve budget neutral implementation of the PDGM case-mix system. In addition, we are extremely concerned with CMS’ proposed payment update of only 2.9%, given the extraordinary inflationary environment and continued labor and supply cost pressures HH agencies face.

These two factors are the main driver of the rule’s substantial net negative update of 4.2%. Both the timing and scale of this negative update would cause disruption of the field at the worst possible time, given the current economic and COVID-19 pressures. Workforce burdens are also posing substantial challenges on HH agencies (HHAs), especially given their reliance on nurses and other personnel who are willing to take on the challenges of providing home-based care.


  • Share the attached summary with your senior management team to examine the impact these payment changes would have on your organization in CY 2023.
  • Listen to the recording of the July 19 members-only conference call, during which staff and AHA members discussed the rule’s key elements, including top concerns for AHA’s comment letter to CMS. 
  • Submit a comment letter on the proposed rule to CMS not later than Aug. 16 explaining the rule’s impact on your patients, staff and facility, and local healthcare partners.


A recording is available of AHA’s July 19 member call during which this proposed rule is discussed to gather input for our comment letter to CMS. The recording and related materials are available in the HH section here.

The AHA urges all HH agencies to submit comments to CMS by Aug. 16. Comments may be submitted electronically at www.regulations.gov.


For questions about payment provisions, contact Rochelle Archuleta, AHA’s director of policy, at rarchuleta@aha.org; for quality-related questions, contact Caitlin Gillooley, AHA’s director of policy, at cgillooley@aha.org.

View the detailed Regulatory Advisory

Key Resources


Related Resources