CMS finalizes small payment update for home health agencies for CY 2023

The Centers for Medicare & Medicaid Services today issued its calendar year 2023 final rule for the home health prospective payment system, which would increase HH payments by a net 0.7%, or $125 million, in calendar year 2023 relative to CY 2022. This net update includes a market basket update of 4.1%, a productivity cut of 0.1 percentage points, as well as an increase of 0.2 percentage points for outlier payments. It also includes a cut to all payments of 7 percentage points in order to achieve budget-neutrality for the Patient-driven Groupings Model on a prospective basis. However, the agency will not implement this budget-neutrality cut in one year, but rather phase it in through two. Therefore, it will implement half of the cut, 3.5 percentage points, in CY 2023. The AHA remains very concerned about the unprecedented scale of the PDGM budget neutrality cut. CMS finalized its proposal to require HH agencies to report all-payer patient assessment data, but will provide a phase-in period for CY 2025 in which failure to submit the data will not result in a penalty. The agency also finalized several technical amendments to the timelines used to calculate performance in the HH Value-based Purchasing program.