On November 1 the Centers for Medicare & Medicaid Services (CMS) issued the Calendar Year 2025 Home Health Prospective Payment System (HH PPS) final rule, which updates Medicare payment policies and rates for Home Health Agencies. Unlike other Medicare provider types that have PPS rule updates corresponding to the federal fiscal year (10/1), home health updates begin Jan 1. A summary of the final rule is available here: Calendar Year (CY) 2025 Home Health Prospective Payment System Final Rule Fact Sheet (CMS-1803-F) | CMS
For anyone interested, the full Final Rule text from the Federal Register is available here: Home Health 2025 Final Rule
Regarding payment updates, CMS is set to raise home health payments by 0.5% ($85 million) in 2025. This increase stems from a 3.2% market update, which is balanced by a 0.5% reduction due to productivity adjustments and a 0.4% decrease for outlier payments. Additionally, a -1.8% behavioral adjustment, which is half of the initially proposed -3.6%, will be implemented on January 1 as a part of the new patient-driven groupings model by CMS. The agency plans to phase in the remaining adjustments over the upcoming years.
Last years, covering the 2024 final rule, I wrote about the PDGM implementation and CMS’ need to recalibrate the reimbursement model due to its ongoing estimating problems – misses in terms of how providers would adjust and bill. This is the genesis of the “behavioral changes” updates (effectively, rate reductions). The 2024 post is here: https://rhislop3.com/2023/11/13/home-health-2024-final-rule/
Per CMS: This rule finalizes a permanent prospective adjustment of -1.975% (half of the calculated permanent adjustment of -3.95%) to the CY 2025 home health payment rate to account for the impact of implementing the Patient-Driven Groupings Model (PDGM). This adjustment, which is required by the Bipartisan Budget Act of 2018 and amended section 1895(b) of the Social Security Act, accounts for differences between assumed behavior changes and actual behavior changes on estimated aggregate expenditures due to the CY 2020 implementation of the PDGM and the change to a 30-day unit of payment.
In addition, CMS is finalizing a crosswalk for mapping responses on the current Outcome and Assessment Information Set-E (OASIS-E) to the prior OASIS-D responses for use in the methodology to analyze the difference between assumed and actual behavior changes on estimated aggregate expenditures; recalibrated PDGM case-mix weights; and updated low-utilization payment adjustment (LUPA) thresholds, functional impairment levels, and comorbidity adjustment subgroups.
From the Rule, a few other updates/changes to note.
- CMS is finalizing updates to the HHA Conditions of Participation to minimize unnecessary care delays, ensuring that referring entities and prospective patients can choose the most suitable HHA for their care needs. CMS is establishing a new standard that mandates agencies to create, implement, and sustain a patient acceptance-to-service policy through yearly reviews, applied uniformly to every prospective patient referred for home health care. The policy must include criteria related to the agency’s ability to deliver care, such as the anticipated needs of the referred patient, the HHA’s caseload and case mix, staffing levels, and the staff’s skills and competencies. This is a direct response to noted referral acceptance problems whereby, typically hospital-initiated referrals, are being turned down by agencies.
- CMS is finalizing the addition of four new standardized patient assessment data elements in the Social Determinants of Health (SDOH) category and modifying an existing item in the same category, starting with the 2027 Home Health Quality Reporting Program through the OASIS. The new assessment items include one related to living situation, two concerning food, and one about utilities.
- Request for Information (RFI) on Future Performance Measure Concepts for the Expanded HHVBP Model
The final rule summarizes comments received on a summary of responses to RFI that will build on input from the Expanded Home Health Value-Based Purchasing (HHVBP) Model’s Implementation and Monitoring technical expert panel (TEP). This includes functional measures that enhance the current cross-setting Discharge (DC) Function measure. These measures encompass care activities such as bathing and dressing, which are crucial for home health patients and caregivers but are not covered by the DC Function measures. - CMS is finalizing a new data reporting standard to encompass a wider array of acute care respiratory illnesses. Starting January 1, 2025, LTC facilities must electronically submit data on COVID-19, influenza, and respiratory syncytial virus (RSV) in a uniform format and at intervals designated by the Secretary. This standard will supplant the existing COVID-19 reporting requirements for LTC facilities, which will be phased out in December 2024.