Originally published in our Fall 2024 Newsletter.

With the exception of our association and the minority of Medicare-certified home health agencies within its membership, Rhode Island has been silent on a priority Congressional bill to curb dire cuts to our services. This is because the majority of home care companies that accept Medicaid are not acting as good stewards of our industry by advocating for Medicaid patients and the home health workforce. The Rhode Island Partnership for Home Care is seeking to change this circumstance by encouraging Medicare-certified home health agencies to step up and become leaders in home care by joining our association.

The Preserving Access to Home Health Act, Senate Bill 2137 introduced by Senators Debbie Stabenow (D-MI) and Susan Collins (R-ME) and House Resolution 5159) introduced by Representatives Terri Sewell (AL-7) and Adrian Smith (NE-3), proposes to safeguard access to essential home-based, clinically-advanced healthcare services for older adults and people living with disabilities by preventing the U.S. Centers for Medicare and Medicaid Services (CMS) from implementing devastating permanent and temporary payment cuts. Passage of this legislation is imperative to ensure the continued functioning of the Medicare Home Health Program.

In 2018, Congress directed CMS to change the Medicare home health payment system beginning in 2020. In doing so, Congress required the new payment system be budget neutral compared to the old system, intending that post-2020 payments should be as if the new system had not been enacted. To achieve budget neutrality, CMS was authorized to make certain payment adjustments on both permanent and temporary basis that allowed for a reconciliation of assumed behavior changes and actual behavior changes.

Thus, in 2020, CMS updated the Medicare Home Health payment system with a new system contrived as the Patient-Driven Groupings Model (PDGM). This system is supposed to be budget neutral compared to the old system. Congress charged CMS with ensuring budget neutrality and granted the federal agency with authority to permanently and temporarily change payment rates to account for provider behavioral changes associated with the new system. Despite stakeholder input, including from the Rhode Island Partnership for Home Care, CMS’s interpretation of its budget neutrality mandate has unfortunately led to significant reductions in payments. These reductions are essentially resetting the base payment rates at much lower, unsustainable levels, and are anticipated to deepen in future years. The bill repeals CMS’s authority to make these permanent and temporary payment cuts based on its misguided budget neutrality methodology.

This bill also instructs the Medicare Payment Advisory Commission (MedPAC) to analyze the Medicare Home Health Program. Under current law, MedPAC is allowed to review the effect of Medicare payment policies on the delivery of healthcare services outside of Medicare. This provision would require MedPAC to report on aggregate trends under Medicare Advantage and other commercial payors, as well as the Medicaid Program, and consider the impact of all payors on access to care for the Medicare beneficiary population. It also requires MedPAC to be transparent in its calculations and it updates the Medicare home health cost reports to include data on visit utilization and total payments by program.

On June 26, 2024, CMS released their proposed 2025 Home Health Rule with compounding massive payment cuts. Included in the proposed rule to be effective for January 1, 2025 was a 4.067% cut to the home health base payment rate. This comes on top of a 3.925% cut for 2023 and a 2.89% cut for 2024. These cuts are based on a flawed methodological approach for calculating the impact of provider behavior under PDGM. In addition, CMS proposes an increase in temporary “claw back” cuts to home health payments to approximately $4.5 billion, up from $3.5 billion last year. These cuts make for an impossible environment for Medicare-certified home health providers.

These actions by CMS are why the Rhode Island Partnership for Home Care is specifically targeting the remaining Medicare-certified home health agencies to join our association. Rhode Island’s home health providers need to come together in order to amplify our voice advocating against these proposed cuts. Please contact the Rhode Island Partnership for Home Care’s office at (401) 351-1010 to join or renew your company’s membership before our industry takes another payment hit by CMS.