08.25.2022

Will home health rate cut be frozen?

Home health agencies are battening the hatches for Medicare’s proposed rate cut in 2023, with industry advocates cautioning that a 4.2 percent reduction could leave as many as 44 percent of agencies operating with negative margins.

But uncertainty about the reduction is growing, as a grassroots pushback gains momentum and Congress eyes legislation aimed at blocking the cut. A new bill known as the Preserving Access to Home Health Act would freeze the cut and prevent the Centers for Medicare and Medicaid Services (CMS) from reducing home health payments until 2026.

Identical versions of the bill have been introduced in the House by Reps. Terri Sewell (D-AL) and Vern Buchanan (R-FL) and in the Senate by Sens. Debbie Stabenow (D-MI) and Susan Collins (R-ME).

Close timeframe shaping up

But the timeframe for getting legislation passed is running neck and neck against CMS finalization of the FY 2023 payment rule.

“The comment period for the proposed rule just ended Aug. 16, and CMS is reviewing comments right now to ready the final rule for release in the fall,” said SimiTree Principal Rob Simione, who serves as Senior Vice President for Financial Consulting.

“Generally, the final rule is issued in October, although the timing can vary a little bit. Last year, for example, it was issued the first week of November. This means the proposed legislation to block the pay cut is going to be under consideration by Congress almost simultaneously with the move by CMS to finalize the pay cut.”

What does that mean for agencies, and the fate of the pay reduction?

“That’s up to Congress,” Simione said. “We know from experience that Congress doesn’t necessarily act quickly and that getting a bill introduced doesn’t necessarily ensure a bill will be enacted. But we also know from experience that there have been times an industry outcry was heard, and Congress responded. There’s no way to predict whether that will happen in this case.”

Taking precautions

SimiTree financial consultants are advising agencies to move forward as if the 4.2 percent rate cut will be levied, enacting changes specifically designed to trim fat, strengthen cash flow and optimize reimbursement so that no monies owed go unpaid due to claims issues.

“Almost every agency has at least some room for improvement in this regard,” Simione said. “From infrastructure to intake to workflow and processes, this is the time to optimize it all. Agencies need to focus on their efficiencies and really drill down on revenue capture.”

SimiTree can help

SimiTree data analysts can take away at least some of the uncertainty about reimbursement in 2023, illustrating for agencies what the projected reduction in reimbursement would look like if the 4.2 percent rate cut goes forward.

Using the latest CMS data, SimiTree can quickly provide an individualized impact analysis showing anticipated figures for an organization.

In addition, SimiTree budgeting experts are available to help with all aspects of planning and forecasting for 2023.

The financial experts at SimiTree work with agencies of all sizes to help shore up margins with financial and operational assessments, identifying issues that bog down the revenue cycle, lead to claims denials, or negatively impact reimbursement.

Use the form below to contact us today to begin the discussion for addressing the uncertainties ahead and putting together a plan for improving the financial health of your organization.

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