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


CMS estimates that Medicare payments to home health agencies in 2023 will increase in the aggregate by 0.7%, or $125 million compared to 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 January 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; 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 to -7.69% adjustment in the proposed rule). However, to…

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