CHA News

Medicare Payments to Home Health Agencies Will Increase by 0.7%

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The Centers for Medicare & Medicaid Services (CMS) has issued the final rule for the home health (HH) prospective payment system for calendar year (CY) 2023.    

CMS estimates that overall Medicare payments to HH agencies in CY 2023 will increase by 0.7% ($125 million) compared to CY 2022. This is a significant increase compared to the proposed rule, which was estimated to reduce payments by 4.8% (-$810 million) compared to CY 2022. The increase is a result of several factors. The finalized 0.7% increase reflects a: 

  • +4.1% market basket update 
  • -0.1% productivity adjustment 
  • -3.5% Patient-Driven Groupings Model (PDGM) budget neutrality adjustment 
  • +0.2% outlier payments 

Instead of implementing the full PDGM behavioral adjustment of -7.85%, CMS will phase it in over two years with cuts of 3.925%, or approximately $635 million, in FFYs 2023 and 2024.  

Additionally, the final rule:   

  • Updates payment rates for home infusion therapy services   
  • Requires HH agencies to submit data to the HH Quality Reporting Program for all payers, beginning in CY 2025   
  • Changes the baseline year for the expanded HH Value-Based Purchasing Model    

More details on the final rule are available in the CMS fact sheet. CHA will make a detailed summary available to members in the coming weeks.