The Centers for Medicare & Medicaid Services (CMS) issued the Calendar Year (CY) 2025 Home Health Prospective Payment System (HH PPS) proposed rule, which would update Medicare payment policies and rates for Home Health Agencies (HHAs).
With the rise of Medicare Advantage enrollment across the nation (presently over 51%) and a major staffing shortage. CMS is proposing a permanent prospective adjustment to the CY 2025 home health payment rate of 4.067%. The cause for this adjustment is due to the Medicare behavioral-based behavioral adjustment. “This adjustment 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,” CMS wrote in a fact sheet on the proposed rule.
This is not the first time Medicare has proposed applied payment reductions to the Home Health payment model. In CY 2023, Medicare applied a payment reduction of 3.925% and in CY 2024, Medicare applied another payment reduction of 2.89%. This follows a steady trend by Medicare as it continues to further strain an industry that is presently plagued with a mired of issues.
In addition to the payment reductions, Medicare is looking to change the PDGM case-mix weights as well as LUPA thresholds based on CY 2023 claim data.