Outlining the CMS 2023 Home Health Final Rule

The Center for Medicare and Medicaid Services (CMS) released its final home health payment rule for Calendar Year (CY) 2023 on October 31, 2022. We’ve outlined the must-know details for home health providers to stay informed.

What’s finalized for CY 2023?

Payment Highlights

• CMS estimates that Medicare payments to home health agencies for CY 2023 will increase by 0.7% ($125 million). This slight increase reflects a -3.925% ($635 million) permanent behavioral adjustment which is offset by a 4.0% ($725 million) market basket update, and the effect of a 0.2% ($35 million) increase with the updated Fixed Dollar Loss (FDL). CY 2023 will have a national, standardized payment of $2,010.69 per 30-day period for those agencies that submit the required quality data. This ensures aggregate expenditures remain budget neutral.
• The rule finalizes a permanent 5% cap on negative wage index changes regardless of the underlying reason for the decrease. This is stated to improve predictability in home health payments.
• CMS finalized updated LUPA thresholds, as well as an update to the functional points and functional impairment levels by HIPPS code. As in CY 2022, functional points that are assigned by response trend lower. We will also see a decrease in the LUPA thresholds with all 6 visit thresholds eliminated.
• Finalized Comorbidity adjustment changes are also based on CY 2021 data and show an increase from 20 subgroups to 22 subgroups for the Low Comorbidity Adjustment. The Low Comorbidity table includes an addition of four new subgroups and removal of two subgroups. The High Comorbidity adjustment changes finalized an increase to 91 interactions. The table changes are being updated to reflect the final coding changes.

Value-Based Purchasing Highlights

• Changes in definitions and terms associated with VBP are finalized. Baseline year will be updated to HHA baseline year. This will determine the improvement threshold for each measure. Model baseline year will be the calendar year used to determine benchmark and achievement threshold for each measure.
• A change for baseline, performance, and payment years for VBP is finalized with no changes from the proposed rule. This table that is included in the final rule reflects the changes.
  • It is believed that these changes will allow all eligible HHAs, starting with the CY 2023 performance year, to compete on a level playing field with all HHA baseline data being after the peak of the pandemic.

OASIS Highlights

• CMS finalized the end of the suspension of collecting OASIS on non-Medicare/non-Medicaid HHA patients. HHAs would be required to submit all-payer OASIS data for purposes of the HH Quality Reporting Program (QRP), that will begin with the CY 2027 program year. CMS did finalize a change from the proposed rule for the phase-in period. Proposed as between January 1 through June 30 of 2024, this was finalized to postponement to the same time span, but the year changed to 2025.  A failure to submit during this period will not result in a penalty. The submission of OASIS data on home health patients regardless of payor source will ensure that CMS can appropriately assess the quality of care provided to all patients receiving skilled care by all Medicare-certified HHAs that participate in the HH QRP.
  • This increase in OASIS collection associated with all payors is expected to cost each agency approximately $23529.82 annually. It is noted that any collection requirements must be reviewed and approved by the Office of Management and Budget (OMB) before it will be effective.
• OASIS-E will be implemented January 1, 2023. This is a major change from the current data set and will require significant preparation to ensure accurate assessment of the new items.

Additional Resources

As new regulatory updates are released, it is important to ensure your organization is well-equipped to adapt. McBee is dedicated to providing resources to help organizations nationwide deliver continuous quality care.