CMS released the home health Medicare final payment rule for calendar year (CY) 2024 on November 1, 2023. The rule finalized the payment updates with an estimated aggregate increase of 0.8%. This translates into an overall estimated increase in payments to home health agencies of $140 million in CY 2024, as compared to CY 2023. The payment rate update is made up of multiple factors, including a 3% payment update, less a 2.890% permanent behavioral adjustment plus an increase of 0.4% for the fixed-dollar loss ratio for outlier payments.
While the aggregate increase in home health payments for CY 2024 came as a relief compared to the 2.2% decrease that was proposed, the permanent behavioral adjustment is an industry hot button prompting ongoing advocacy efforts by industry stakeholders to reduce or eliminate the adjustment.
CY 2023 National Standardized 30-Day Period Payment | CY 2024 Permanent Behavioral Adjustment Factor | CY 2024 Case-Mix Weights Recalibration Neutrality Factor | CY 2024 Wage Index Budget Neutrality Factor | CY 2024 Labor-Related Share Budget Neutrality Factor | CY 2024 HH Payment Update | CY 2024 National Standardized 30-Day Period Payment |
|---|---|---|---|---|---|---|
| $2,010.69 | 0.97110 | 1.0124 | 1.0012 | 0.9998 | 1.030 | $2,038.13 |
Included in CMS’ overall estimate of increased spending for home health payments for CY 2024 are low utilization payment adjustments (LUPAs) that are paid on a per-visit basis. These per-visit rates increased from CY 2023 to CY 2024 for all disciplines as shown below.
HH Discipline | CY 2023 Per-Visit Payment Amount | CY 2024 Wage Index Budget Neutrality Factor | CY 2024 Labor-Related Share Budget Neutrality Factor | CY 2024 HH Payment Update | CY 2024 Per-Visit Payment Amount |
|---|---|---|---|---|---|
| Home Health Aide | $73.93 | 1.0012 | 0.9999 | 1.030 | $76.23 |
| Medical Social Services | $261.72 | 1.0012 | 0.9999 | 1.030 | $269.87 |
| Occupational Therapy | $179.70 | 1.0012 | 0.9999 | 1.030 | $185.29 |
| Physical Therapy | $178.47 | 1.0012 | 0.9999 | 1.030 | $184.03 |
| Skilled Nursing | $163.29 | 1.0012 | 0.9999 | 1.030 | $168.37 |
| Speech-Language Pathology | $194.00 | 1.0012 | 0.9999 | 1.030 | $200.04 |
Home Health agencies that do not submit the required quality data will incur a 2% payment reduction for the year from the rates shown in the tables above.
In addition to the rate changes noted above, other changes to the Patient-Driven Groupings Model were finalized in the rule, including changes to functional impairment points and comorbidity adjustment subgroups.
For help in estimating the potential payment impacts from this rule on your agency, please reach out to a Home Care & Hospice professional at FORVIS.
Because CMS continues to plan for further rate reductions in subsequent years, now is the time to let your voice be heard by joining industry advocacy efforts to help deter detrimental rate changes. We also recommend evaluating productivity levels to help prepare and manage further rate decreases in the future.
Stay tuned for further information from the 2024 home health final rule coming soon. If you have any questions or need assistance, please contact one of our professionals.