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Home Health & Hospice Week

Budget:

Budget For 2023 Comes With Pros And Cons For Home Health

Published on Fri Dec 30, 2022

Appropriations act passed on the night before Christmas Eve.

Home health agencies are getting both presents and lumps of coal in the $1.7 trillion omnibus spending bill that averts a government shutdown.

The House passed the Consolidated Appropri­ations Act, 2023, on Dec. 23, and President Biden is expected to sign it into law by Dec. 30. The legislation will fund the government through the end of the fiscal year on Sept. 30, 2023.

HHAs had been hoping that in its budget package, Congress would eliminate or postpone the -7.85 percent productivity adjustment under the Patient-Driven Groupings Model, the first half of which is set to take effect Jan. 1. Or, they hoped lawmakers would at least grant them a reprieve from the second half of the cut that the Centers for Medicare & Medicaid Services intends to make next year.

Reminder: CMS implemented the first half, a -3.925 cut, in its 2023 final rule published in the Nov. 4 Federal Register (see HHHW, Vol. XXXI, No. 39-40). Many of the 900 comment letters submitted for the rule criticized the cut on a number of fronts, and agencies and their representatives have been lobbying heavily for its elimination or at least reduction or postponement.

But that lobbying hasn’t borne fruit in the year-end spending package, which doesn’t address the reduction that all but wiped out HHAs’ pay increase this year. Rates taking effect Jan. 1 are 0.7 percent higher than 2022 rates, overall.

The Medicare Payment Advisory Commission’s newly released 25 percent Medicare profit margin figure for HHAs hurt the lobbying effort, the National Association for Home Care & Hospice believes.

There are some benefits for HHAs in the budget bill, however.

“We are very pleased that the legislation postpones the risk of a 4 percent Medicare payment rate cut for all providers, including home health agencies and hospices,” NAHC notes in a statement about the legislation.

The bill puts off a 4 percent Pay-As-You-Go (PAYGO) sequestration cut for both 2023 and 2024, notes McDermott+ Consulting, an affiliate of law firm McDermott Will & Emery, in a bill summary.

“The Statutory Pay-As-You-Go Act of 2010 (PAYGO) requires that automatic payment cuts of 4 percent be put into place if a statutory action is projected to create a net increase in the deficit over either five or 10 years,” McDermott explains. “The PAYGO sequester has never actually been implemented despite being triggered on multiple occasions,” it notes.

Last December, Congress postponed PAYGO cuts for a year in its 2022 omnibus spending package (see HHHW, Vol. XXX, No. 44). This year, at least that relief will last two years.

“The CAA 2023 would ‘wipe the PAYGO scorecard clean’ for FY 2023 and FY 2024,” McDemott says. But “Congress likely will have to contend with PAYGO obligations again in two years,” it cautions.

Rural Add-On Limps On Another Year

Another win for HHAs in the soon-to-be law is an extension of the last rural add-on provision.

Reminder: CMS began phasing out the rural add-on in 2021, based on law. In 2022, only agencies in low population density counties saw an add-on, and it was reduced to 1 percent. Even that modest boost was scheduled to sunset as of Jan. 1.

Now this bill extends the 1 percent add-on for low population density counties an additional year, so it expires on Jan. 1, 2024.

That designation applies to 334 out of 2,006 rural counties in the nation, covering 22 different states, NAHC calculates in its member newsletter.

“The extension of support for rural home health services is … a step in the right direction, as we have experienced a notable decline in access to care in the over 2,000 rural counties,” NAHC says.

The provision “is an exciting step toward continuing to support rural providers serving older adults,” says Katy Barnett with LeadingAge in the trade group’s review of the bill.

But “stakeholders will need to continue to advocate for the sustainability of this add on in the future,” Barnett warns.

Also helpful to rural areas is the extension of telehealth flexibilities that came under the COVID-19 public health emergency.

“In July 2022, the House overwhelmingly passed … [a] bill [that] would extend many of the telehealth PHE waivers and flexibilities for two years,” McDermott reviews. “The Senate did not act on similar legislation before the lame duck session. Throughout fall 2022, stakeholders urged Congress to include language in the year-end package to extend telehealth waivers and flexibilities for two years.”

Lawmakers seem to have listened, including the two-year extension in the legislation.

“Telehealth has become an essential care tool not only in … rural areas, but throughout the nation,” NAHC says. “Continuing the flexibilities in Medicare that allow for expanded telehealth care will provide the opportunity to design and implement this needed modernization of the Medicare program,” it notes.

Congress to CMS: Cough Up Data, Listen To Stakeholders

And while lawmakers didn’t act on agencies’ pleas to hold off the PDGM productivity adjustment, they did take some steps addressing the matter.

In a section of the bill titled “Increasing Transparency For Home Health Payments Under The Medicare Program,” Congress lays out actions CMS must take to make the data and methodology it uses for rulemaking available to the public.

And CMS must “use an open door forum, a town hall meeting, a web-based forum, or other appropriate mechanism to receive input from home health stakeholders and interested parties on Medicare home health payment rate development … with respect to the home health prospective payment system rate for calendar year 2023,” the bill further directs.

Why the instruction? “In years past, CMS had included data used to observe behavioral changes from the previous payment system to … PDGM,” Barnett recounts. “However, in the CY2023 proposed rule, this data was not available to providers,” she notes.

“Even though this legislation will not impact the rates for CY2023, that Congress listened to our advocacy and took action to address our concerns is a positive,” Barnett maintains. “LeadingAge is hopeful that this will put us on the path to achieving a payment approach that works for our mission-driven, nonprofit members and guarantees that all older adults and their families can get needed care and services,” she adds.

“While the pandemic and ongoing cost inflation has brought out the best in the patient-centered dedication of home care and hospice providers, the pressures on these essential care providers is mounting,” NAHC warns. “We … call on Congress … to ensure that the 14 million patients annually receiving home care and hospice services continue have full access to care in the setting of their choice, their own homes,” it says.

Remarks President Biden made about Democrats and Republicans could also apply to providers. “Neither side got everything it wanted in this agreement — that’s what happens in a negotiation,” the President said in a release about the bill.

Note: The text of the bill is at https://rules.house.gov/sites/democrats.rules.house.gov/files/BILLS-117hr2617eas2.pdf.

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