Home Health & Hospice Week

2024 rate cuts will be devastating, commenters agree.

Home health agencies are coming for CMS’ attempt to slash their pay once again, but the vociferous protests included in providers’ and representatives’ comment letters may fall on deaf ears.

Recap: In the home health 2024 proposed payment rule published in the July 10 Federal Register, the Centers for Medicare & Medicaid Services proposes cutting home health agency payment rates by 2.2 percent next year. That’s based in part on an estimated 5.1 percent behavior assumption adjustment. (See more rate proposal details in HHHW by AAPC, Vol. XXXII, No. 24-25).

“UnityPoint at Home opposes the continued erosion of Home Health episodic rates,” say execs Jenn Ofelt, Christy Pinkley, and Cathy Simmons. “This year’s proposed 2.2 percent aggregate reduction reflects an ongoing rate assault that is based on faulty assumptions, is not driven by actual data, and does not prioritize overall access to services, including residents in rural areas and those with Medicaid coverage,” the leaders for the Iowa healthcare system-based chain blast in the letter.

“These rate reductions force HHAs to make unenviable decisions to close HHAs, reduce geographic service areas, and/ or reduce overall services, which ultimately equates to less patients being served and poorer population health outcomes,” the UnityPoint leaders stress. “With inflationary pressures, proposed rate reductions are tone-deaf to heightened costs attributable to labor, supplies, and mileage,” they charge.

“This is the fourth consecutive year that the payment update does not reflect the actual cost increases experienced by HHAs, and UnityPoint at Home does not anticipate that cost pressures will revert to prepandemic levels,” the letter says. “In the meantime, CMS continues on a path of rate reductions that undercut the financial viability of a huge segment of the Home Health industry,” they maintain.

“I am a seasoned home health employee, and I see firsthand the impact that these cuts will have on the ability of home health agencies to provide quality care to their patients,” protests Cheyenne Harvey in Utah in a comment letter on the rule. “These cuts would have a devastating impact on the patients who rely on home health care, and they are irrational from a financial standpoint,” Harvey argues.

Many providers write letters highlighting the strangling of home health access in their areas. “In my community, changes in payment rates have led ... two hospital-based home health agencies … to shut down or merge due to the difficulty in making ends meet under PDGM and continued CMS cuts,” highlights Lauren Reynolds in a comment letter. “Home health spending in the United States has dropped from $18 billion to $16 billion when changes with PDGM were supposed to be budget neutral. It’s anticipated that another $1 billion cuts in spending on home health in the United States will occur in 2024. That’s a $3 billion dollar cut in critical services in five years, services meant to keep Medicare beneficiaries out of the hospital … at home. Home Health care is much less expensive than the emergency room, ICU or repeat hospitalizations,” Reynolds emphasizes.

“We have experienced a significant reduction in our ability to serve home health patients,” reports Salus Home Health in California. “The proposed rate cuts will only increase the likelihood that home health services access in our community will further diminish,” the agency warns in its comment letter. “We have experienced unprecedented cost increases particularly in staff wages and benefits without a corresponding payment rate increase,” Salus tells Medicare officials.

“We are in a rural area in [West Virginia] and patients do not have many choices in providers,” relates HomePlus in its comment letter. “Cutting payments to the home health agencies will decrease patients’ access to these services and as a consequence, increase hospitalizations and lengthen hospital stays. Further, reductions in rates will reduce our ability to hire skilled nurses/therapists,” the agency illustrates. “Please do not cut home health rates,” it implores.

“Home health agencies like [Visiting Nurse and Hospice for Vermont and New Hampshire] are already facing significant financial pressures,” stresses VNH CEO Johanna Beliveau in the nonprofit’s comment letter. “Imposing further permanent rate cuts in 2024 could not come at a worse time,” she tells CMS.

Rural and isolated home health areas, “places where there are already significant barriers to accessing home health services,” will be hit particularly hard, warns home health administrator Travis Jones in his comment letter.

“The proposed rate cuts will further erode patient access to the services they depend on,” predicts Beliveau. “The only remaining cost reduction options for home health agencies like VNH will come at the expense of reduced care access. Already, over the last two years, we have been forced to significantly reduce our service region due to the rising costs of providing care in rural Vermont,” she reports.

“Other agencies have closed operations or reduced services in our service area or elsewhere in the state,” Valerie Rivera with Wichita Home Health Service Inc. in Texas says in her comment letter. “If the proposed rate cuts are implemented in 2024, this organization will be faced with the difficult decision of cutting staff and provision of care to rural patients,” Rivera warns.

CMS Poised To Squeeze HH Access Based On Problematic Calculations

“CMS has a flawed ideology that home health agencies are scamming the system,” criticizes Hayswood Home Health in its comment letter. “There are some bad player[s] out there, but not the widespread fraud that CMS seems to think there is. Most agencies are just trying to serve their community by taking care of patients and employees,” the agency says.

“Agencies, such as mine, that still provide a high level of care to patients and provide benefits to employees do so at a loss,” the HHA tells Medicare officials. “For CMS to consistently give punitive pay to providers that have absorbed a decade or more of cuts in some shape or form, increased oversight and markedly higher cost is unconscionable,” Hayswood accuses.

Long term effects: “CMS needs to think about what will happen to patients once agencies close,” the provider urges. “What will happen to those patients? Where will they go for care and how will they get there? Lastly, what will that cost?” it asks.

“Home health is already a financial struggle,” insists Blake Ollivier in Idaho. “Lowering the rate of reimbursement would only result in reduction of quality of care for patients. Everything costs drastically more than it did a few years ago, and cutting crucial funding would have negative implications on the health needs of all patients,” Ollivier cautions CMS.

“Cutting resources to this life-saving service is a mistake,” one anonymous provider chides.

In fact, the 2.2 percent reduction figure is misleading, insists Jennifer Elder with the Texas Association for Home Care & Hospice. “The reality is that home health payment reductions since the beginning of PDGM have topped over 9 percent,” Elder stresses in the trade group’s comment letter.

“Implementation of this proposed payment rate reduction would devastate the home health industry, which is the very industry that saves Medicare billions of dollars a year in unnecessary hospitalizations, facility admissions, and emergency room visits,” Elder underscores. “Another year of significant cuts will place the majority of Texas home health agencies at risk of closing, forcing the vulnerable patients we serve into higher cost nursing facilities. The cumulative impact of these proposed cuts is billions of dollars carved out of the Medicare home health program which is only a small percentage of the overall Medicare budget,” she points out.