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CMS Cuts to Medicare Home Health

What is Home Health?

Home health care is a wide range of health care services that can be given in your home for an illness or injury. Home health care is usually less expensive, more convenient, and just as effective as care you get in a hospital or skilled nursing facility (SNF).


Examples of skilled home health services include:
– Wound care for pressure sores or a surgical wound
– Patient and caregiver education
– Intravenous or nutrition therapy
– Injections
– Monitoring serious illness and unstable health status

What is the issue?

New CMS Payment Rule Proposes Billions in Steep Cuts to Home Health Care

  • On June 17, 2022, CMS proposed to cut rates for in-home Medicare services in 2023 by an unprecedented, permanent -7.69% ($1.33 billion in 2023 alone). The net result of this cut along with inflation updates is -4.2% in 2023. 
  • CMS seeks to impose an additional $2 billion in cuts in 2024 or beyond, which is an unjustified clawback of payments for critical health care delivered to seniors and disabled persons during the pandemic (in 2020 and 2021). 
  • CMS also plans to add an additional ~$1 billion for alleged “overpayments” for 2022 services. This clawback of funds is an unprecedented overreach. 
  • These new reductions are on top of CMS continuing the assumption-based -4.36% behavioral change adjustment that has reduced rates since 2020. 
  • The cumulative impact of these cuts is billions of dollars carved out of the Medicare home health program as providers are already facing significant challenges due to the pandemic, threatening patient care and access. Small, rural, and hard-to-serve communities will be uniquely harmed.

Medicare Payment Cuts Threaten the Home Health Care System – Valued by America’s Seniors and Disabled

Home health agencies strongly oppose the Centers for Medicare & Medicaid Sevices’ (CMS) CY2023 proposed payment rule that will result in the decimation of access to home health services. The home health community urges Congress to take action to stop CMS’s massive cuts to Medicare home health care.

  • Care in the home is the safer and preferred choice for our seniors and persons with disabilities. Polling shows overwhelming preference for care in the home: 94% of Medicare beneficiaries say they would prefer to receive post-hospital care at home. 
  • Reducing payments to home health threatens access to vital care in the home.  Previous payment cuts reduced care access. As a result, costs of care will go up, with increased hospital readmission rates, unnecessary hospitalizations, and increased use of short-term skilled nursing stays.
  • Cuts will negatively impact the growing and high demand for care in the home. The ability for home health agencies to admit patients for services has declined significantly since March 2020. Home health is the preferred post-acute care option for patients, with a 42% increase in average number of referrals per patient sent to home health (vs 32% per referral to skilled nursing facilities). Strong demand for home health has resulted in a 33% increase in referrals sent to home health. However, due to labor cost pressures and staffing challenges, home health admission rates have declined by 15% over the same period. This troubling trend will only worsen with the onset of destabilizing payment cuts to the home health care infrastructure.
  • Home health care providers and caregivers have been hit hard by the impact of the pandemic and additional payment cuts will exacerbate the workforce and inflation crisis. Home health agencies are burdened by high inflation rates of over 8%, increased fuel costs which uniquely impact home health care caregivers who drive (or use public transportation) to visit every patient. Workforce costs and wage pressures are also on the rise, with wage and benefit costs increasing at steady rates (since the start of the pandemic).
  • Home health utilization and spending is declining and shouldn’t be targeted for more cuts. Since 2011, expenditures for the Medicare home health benefit have been declining: 2011: $18.4 billion/3.4 million users;  2019: $17.9 billion/ 3.3 million users;  2020: $17.1 billion/ 3.1 million users; and 2021: $17.0 billion. Decreases are partly attributable to reductions in the number of patients services, but patient acuity is also on the rise, as is per patient spending. 

Legislation: Preserving Access to Home Health Act of 2022

The Preserving Access to Home Health Act of 2022 will make the following policy changes:

  1. Prevent CMS from implementing any permanent or temporary adjustment to home health prospective payment rates prior to 2026. This would delay cuts currently proposed by CMS for 2023 and beyond, allowing more time for CMS to refine its proposed approach to determining budget neutrality in home health.
  2. Ensure that any adjustments CMS determines to be necessary to offset increases or decreases in estimated aggregate expenditures are made by 2032, such that no cuts would be delayed beyond the end of the budget window.
  3. The legislation is intended to be self-implementing. It would become effective as of the date of enactment and includes instructions allowing for implementation by program instruction or other means.

How to get involved

  • Take Action: Click on the button below to send a pre-written email to your congressional representatives telling them to support the Preserving Access to Home Health Act, which would stop these cuts until 2026. This action only takes one minute to complete!
  • Meet with your congressional representatives: We can help you set up meetings with your lawmakers and be there to facilitate the call with you. Email Maggie DiPasquale at [email protected] for more information on this effort.
  • Spread the word: Share our Facebook, Twitter, and Instagram social media posts with friends and family to get the word out about these devastating cuts.