Washington, D.C.—In response to a requirement of the Consolidated Appropriations Act (CAA), 2023, the Centers for Medicare & Medicaid Services (CMS) presented data used to determine Medicare home health payment rates for calendar year (CY) 2023, including the permanent and temporary rate adjustments calculated under the Patient Driven Groupings Model (PDGM) “budget neutrality” requirements. Also required by the CAA, CMS held a stakeholder meeting on March 29, 2023 featuring CMS staff and its contractor, Abt Associates, which had worked on the development of the PDGM (the new payment system for home health) and related budget neutrality calculations.
NAHC and PQHH said they appreciate CMS holding the webinar and answering questions from home health stakeholders.
According to NAHC, the webinar offered very little new information to stakeholders. The CMS contractor presented a highly technical outline of how CMS derived the budget neutrality adjustments that have led to a 7.85% permanent rate reduction and multi-billion dollar temporary adjustments the agency intends to recover as overpayments for the years 2020-2022.
While the agency and its contractors did answer several questions that were asked in writing before the webinar, the presenters offered no additional insight into the key issues of concern for stakeholders. However, it was clear from the discussion that, while the statute prohibits home health payments based on the utilization of therapy under PDGM, CMS has done just that.
“It is very clear that we continue to disagree with the methodology that CMS employed to determine budget neutrality," said William A. Dombi, president of the National Association for Home Care & Hospice. "The reality is that CMS has rebased payment rates to account for the reducNAHCtion of therapy visits that came about solely because of PDGM. CMS must withhold any further rate cuts to avoid the flaws of PDGM combining with uncontrolled cost inflation to destroy access to one of the few Medicare benefits that brings savings to the Medicare program.”
Several additional takeaways from the event are noteworthy:
- CMS does not believe it is required to demonstrate how certain changes in provider behavior affected expenditures under PDGM and the calculation of the revised payment rates for CY 2023. CMS’s justification for this position is that examining overall expenditures under PDGM equates to assessing the impact of behavior changes.
- CMS acknowledged that it has discretion in when and how any adjustments are applied to future payment years and that it exercised that discretion in reducing the permanent adjustment for 2023 from 7.85% to 3.95% and did not apply any temporary adjustment due to its concerns about the impact on providers.
- CMS stated that it is monitoring the impact of the rate changes on care and noted consideration of cost increases in the current inflationary environment.
- The webinar and related release of data did not offer an opportunity for true dialogue and discussion between home health providers and CMS regarding the agency’s approach to implementing PDGM. The home health stakeholder community continues to believe the CMS methodology and approach is flawed, conflicts with the statute, and has resulted in drastic cuts in payment that are now impacting care delivery across the country.
“We appreciate the opportunity to participate in this presentation and look forward to further responses to outstanding questions,” said Joanne Cunningham, CEO of the Partnership for Home Health Quality. “It is crucial that CMS take into account that the cost of care has significantly increased, and providers are in no position to withstand further rate cuts without additional negative impact on care access beyond what PDGM has wrought.”
