星空入口

Don鈥檛 stop at base rate when calculating rule鈥檚 impact on your pay next year.

The 2.2 percent rate cut is the reimbursement news catching most home health agencies鈥� eyes first, but there are a number of other important payment-related provisions in the home health proposed payment rule released June 30.

The Centers for Medicare & Medicaid Services proposes a base rate of $1,974.38 for calendar year 2024, according to its proposed home health rule scheduled for publication in the July 10 Federal Register. That鈥檚 about 1.8 percent below this year鈥檚 base rate of $2,010.69. (See chart, p. 187 for per-visit rates.)

So why isn鈥檛 the base rate lower, to hit the 2.2 percent reduction CMS sets out in the rule? 鈥淭he base rate is only one out of four factors affecting your payment,鈥� explains Dave Macke, director of healthcare reimbursement services with CPA and advisory firm VonLehman in Fort Wright, Ky. In addition to the base amount, your pay depends on your case mix, the wage index for your area, and this year, the change in the labor portion of the rate.

For case mix, CMS has reshuffled weights, as it does annually under the Patient-Driven Groupings Model. The changes are based on 2022 data, CMS notes in its rule fact sheet.

The HIPPS code with the highest increase will see a 7.8 percent jump in case mix weight to 0.5417 鈥� 3FA11, which represents episodes that are in the Behavioral Health clinical group, no comorbidities, the low functional level, admission source of community and later episode timing, Macke points out.

Twenty-nine HIPPS codes will see an increase of 3 percent or more in 2024, Macke calculates. They are mostly in three clinical groups 鈥� Behavior Health, Medication Management Teaching and Assessment (MMTA) Cardio, and MMTA Endocrine, he notes in his rule analysis.

Meanwhile, 26 HIPPS codes will see a reduction of 2 percent or more, mostly in the musculoskeletal rehabilitation (MS Rehab), MMTA 鈥� Surgical Aftercare, and Neuro clinical groups.

On the wage index front, Sante Fe, New Mexico is the CBSA with the highest increase this year, Macke notes. CBSA 42140 will jump a whopping 26.64 percent to 1.2996 in 2024, if finalized as proposed. Other wage index winners for 2024 are in Washington, Texas, and New York (see chart, p. 189).

Those suffering wage index cuts are in a different boat, because last year CMS capped wage index drops at 5 percent (see HHHW by AAPC, Vol. XXXI, No. 39-40). The index for 40 CBSAs will be reduced by 5 percent this year, with 24 more dropping 4 percent or more, if finalized as-is.

In rural areas, four states will see an increase of more than 2 percent, including North Dakota with a jump of more than 11 percent. On the flip side, three states will be assigned an index at the capped 5 percent reduction 鈥� Hawaii, Washington, and Arizona, according to Macke鈥檚 analysis. Six more will see reductions of 3 percent or more.

CMS also is 鈥減roposing to update the labor-related share [of the base rate] to reflect the proposed 2021-based home health market basket Compensation (Wages and Salaries plus Benefits, which include direct patient care contract labor costs) cost weight,鈥� the rule explains. 鈥淏ased on the proposed 2021-based home health market basket, the proposed labor-related share is 74.9 percent and the proposed non-labor-related share is 25.1 percent.鈥� The labor-related share will be down from the current 76.1, which is good news for low-index areas and bad news for high-index regions.

鈥淭he decrease in the compensation cost weight of 1.2 percentage points is primarily attributable to a lower cost weight of direct patient care contract labor costs as reported in the Medicare cost report data,鈥� CMS details.

History: Wondering how the proposed cut compares to previous years? CMS raised rates 0.7 percent for 2023, 3.2 percent for 2022, 1.9 percent for 2021, 1.3 percent for 2020, 2.1 percent for 2019, and made cuts in the previous eight years: 0.4 percent for 2018; 0.7 percent for 2017; 1.4 percent for 2016; 0.3 percent for 2015; 1.05 percent for 2014; 0.01 percent for 2013; 2.3 percent for 2012; and a whopping 5 percent for 2011. Before 2020, the last Medicare payment rate increase was 1.75 percent in 2010. Some years were affected by the 2 percent sequestration reduction.

LUPA Rates Higher Than CMS Projected

In addition to those four payment factors, CMS is nudging down the Fixed-Dollar Loss ratio for the second year in a row, which will make more payment periods eligible for outlier payments.

Reminder: 鈥淭he FDL ratio and the loss-sharing ratio are selected so that the estimated total outlier payments do not exceed the 2.5 percent aggregate level,鈥� CMS explains in the rule. That rule was put in place after rampant outlier abuse, particularly in southern Florida. Medicare keeps the loss-sharing ratio steady at 0.80, but changes the FDL as needed to keep that 2.5 percent figure steady. 鈥淎 lower FDL ratio means that more periods can qualify for outlier payments,鈥� the rule elaborates.

For 2024, CMS wants to set the FDL at 0.31. That鈥檚 down from 0.35 this year, 0.40 for 2022, and 0.56 since PDGM鈥檚 inception in 2020.

CMS has also recalibrated low utilization payment adjustments, which it also plans to do every year under PDGM. CMS seems to favor the ever-changing LUPA thresholds in part because they make the payments less subject to gaming by agencies, experts say.

Twenty-eight HIPPS codes will see LUPA threshold increases in 2024 and 11 will see threshold decreases, according to Macke鈥檚 rule analysis.

Reminder: The LUPA thresholds are set 鈥渁t the 10th percentile of visits or 2 visits, whichever is higher, for each payment group,鈥� CMS explains in the rule. CMS held off updating the LUPA thresholds for 2021 and 2022 due to the COVID-19 public health emergency鈥檚 effect on visits, but did proceed with the update for this year, the rule recounts.

The percentage of 30-day payment periods that are LUPAs has stayed pretty consistent since PDGM began, according to CMS 鈥� 1.84 percent in 2020, 1.79 percent in 2021, and 1.81 percent in 2022. That鈥檚 higher than pre-PDGM, when simulations showed LUPA rates at 1.69 percent in 2018 and 1.71 percent in 2019.

鈥淲e solicit public comments on the proposed updates to the LUPA thresholds for CY 2024,鈥� CMS says.

Like case mix, outliers, and LUPAs, CMS is also following through on its plan to annually update functional impairment levels. 鈥淔or CY 2024, we propose to use CY 2022 claims data to update the functional points and functional impairment levels by clinical group,鈥� the agency says. Revised OASIS points for functional items and functional level point thresholds are in Tables B17 and B18 in the rule.

For 2024, CMS is also proposing to 鈥渦pdate the comorbidity subgroups using CY 2022 home health data,鈥� the rule notes. The update will 鈥渋nclude 21 low comorbidity adjustment subgroups 鈥� and 101 high comorbidity adjustment interaction subgroups as identified in Table B20,鈥� the agency proposes. See the details in Table B19 and B20 in the rule.

Note: Links to ZIP files with the proposed changes are in the 鈥淒ownloads鈥� section at .