Home Health Industry Pushes Back on CMS Budget-Neutrality Methodology for PDGM

Since the discharge of the U.S. Centers for Medicare & Medicaid Services’ (CMS) proposed fee rule, house well being stakeholders have been sitting of their respective “war rooms” attempting to navigate the proposal.

As suppliers equipped for the revealing of the proposal, many knew that CMS’ evaluation of whether or not the Patient-Driven Groupings Model (PDGM) led to larger, decrease or equal spending in comparison with the outdated fee mannequin could be a significant factor, in accordance with William A. Dombi, the president of the National Association for Home Care & Hospice (NAHC).

Many are pushing again in opposition to CMS’ methodology for assessing funds neutrality, with organizations resembling NAHC expressing their considerations even previous to the discharge of the proposed rule.

“When we found out on Friday that CMS chose to use the same methodology which had been roundly condemned by anybody who had evaluated it, we had to conclude the CMS had effectively declared war against home health,” Dombi mentioned. “I don’t mean that in an emotional sense, but in a practical sense, where the outcome of this proposal could be extraordinarily — not just disruptive — but devastating to the home health care community.”

He made these feedback throughout NAHC’s newest webinar on Thursday.

Overall, the proposed rule comes with a decrease to payment rates by 4.2%, or $810 million much less in comparison with 2022 charges.

“CMS only gets to that [$810 million] by adding in the inflation update, so the inflation update for 2023 is a meager 2.9%,” Dombi mentioned.

The proposed rule additionally features a 7.69% PDGM budget-neutrality adjustment.

“It’s startling to see in this period of high inflation, this tremendous change in the level of the base payment rates,” Dombi mentioned.

Along with the modifications within the fee charge, CMS largely maintained the identical PDGM case combine mannequin however, like final yr, the company recalibrated all 432 case combine weights. CMS additionally recalibrated the LUPA thresholds for the primary time since 2020.

Dombi famous that CMS realized the significance of protecting “some level of stability” for suppliers of providers as a result of modifications made to final yr’s wage index.

“Like they’ve done in their proposal for skilled nursing facilities, hospitals, hospices, and all other provider sectors where there is a wage index applicable, CMS proposes to institute a permanent 5% cap on any negative wage index changes that would reflect changes in workforce costs,” he mentioned.

Additionally, CMS modified the outlier fixed-dollar loss to 0.44, which might then change the variety of outlier episodes.

“CMS does make these modifications for purposes of staying within the 2.5% of the Medicare spend as a budget for outlier spending,” Dombi mentioned.

The house well being business is at present getting ready for the nationwide growth of the Home Health Value-Based Purchasing (HHVBP) Model.

In CMS’ proposal, the beginning date of Jan. 1, 2023 stays the identical, however there are some modifications on the standard reporting. This consists of the requirement that OASIS should be executed for all sufferers — no matter payer supply.

Moving ahead, NAHC is leaning into its advocacy efforts for the house well being business so as to activate modifications forward of the ultimate rule.

“This is not a proposal that we can just feel comfortable and relaxed with to move forward with,” Dombi mentioned. “This is a rule which is going to require a significant amount of advocacy efforts from all of us, in order to end up with an alternative outcome than what we see proposed here by CMS.”