CY 2023 Home Health Prospective Payment System Proposed Rule Summary

On June 23, 2022, CMS published in the Federal Register a proposed rule addressing updates to the Home Health Prospective Payment System rates for calendar year (CY) 2023, home infusion therapy services requirements, and related matters (85 FR 37600). Among other changes, this rule proposes a permanent budget neutral approach to smooth year-to-year changes in the hospice wage index by applying a permanent cap on negative wage index changes greater than a 5 percent decrease from the prior year. CMS also proposes to apply a permanent prospective payment adjustment to the home health 30-day period payment rate to account for any changes in aggregate expenditures resulting from the difference between assumed behavior changes and actual behavior changes, due to implementation of the Patient-Driven Groupings Model and 30-day unit of payment.

CMS estimates that the net impact of the proposed policies would decrease Medicare payments to home health agencies in 2023 by -4.2 percent (-$810 million). This decrease reflects the effects of the proposed 2.9 percent home health payment update, an estimated 6.9 percent decrease from the proposed prospective, permanent behavioral assumption adjustment of -7.69 percent, and an estimated 0.2 percent decrease from the proposed update to the fixed-dollar loss ratio used in determining outlier payments.

For the Home Health Quality Reporting Program, CMS proposes to require reporting of all-payer patient assessment data beginning with payment year CY 2025. For the Expanded Home Health Value-Based Purchasing Model, CMS proposes to modify the baseline and Model year definitions that are used when determining benchmarks and setting achievement and improvement thresholds. For both programs, CMS requests feedback about ways to address disparities and advance health equity. The deadline for public comment is August 16, 2022.