Federal Update: Permanent Medicare Home Health Rate Cut in Final Rule

In early November the Centers for Medicare and Medicaid Services (CMS) issued the Final Rule regarding Medicare home health services payment rates for CY 2024. The permanent cuts contained in the final rule present a significant threat to the home health and hospice services that thousands of Vermonters depend on to heal or age at home.

CMS implemented a new payment methodology on January 1, 2020. It is this new standard rate schedule that CMS is applying cuts. In the proposed rule, CMS called for a total permanent cut of 9.48% to this new standard rate. CMS already started phasing in the cut, beginning with a 3.925% reduction on January 1, 2023, leaving 5.779% for 2024.

Following substantial advocacy highlighting the disastrous impact the rate cut will have on home health agencies, the final 2024 rule contains an additional 2.890%; half the cut it initially proposed for 2024. We have every expectation they will implement the rest of the cut in 2025. In addition, a “clawback” of reimbursements paid at the higher rate going back to 2020 is still on the table.

Companion bills known as the Preserving Access to Home Health Act would postpone the cuts to 2026, allowing time to develop a more thoughtful approach to home health reimbursement. Senator Welch and Congresswoman Balint have already pledged their support for these companion bills. We are working with our partners at the National Association for Home Care & Hospice to advance this critical legislation and protect access to the Medicare home health benefit that thousands of Vermonters depend on.