Earlier this month, CMS issued a pair of proposed rules to update reimbursement for home health and end-stage renal disease services. The CY 2023 Home Health Prospective Payment System (HH PPS) rate update proposed rule (the HH Proposed Rule) was issued June 17, 2022. The CY 2023 End-Stage Renal Disease Prospective Payment System (ESRD PPS) proposed rule (ESRD Proposed Rule) was issued June 21, 2022. Below is a summary of notable proposed changes in the two proposed rules.
HH Proposed Rule
CMS estimates the HH Proposed Rule would result in an aggregate decrease of 4.2% in home health payments in CY 2023 compared to CY 2022, representing a total decrease of $810 million. This would be the result of a 7.69% decrease (totaling -$1.33 billion) in the 30-day payment rate for CY 2023 to account for assumed behavior changes resulting from implementation of the Patient-Driven Groupings Model (PDGM), a proposed 2.9% home health payment update percentage (totaling $560 million), and an estimated 0.2% decrease (totaling -$40 million) resulting from an update to the fixed-dollar loss (FDL) ratio used for outlier payments.
The HH Proposed Rule would also apply a permanent 5% cap on decreases in the wage index, meaning a facility’s wage index for any future year would not be less than 95% of the final wage index for the preceding year. It would also recalibrate case-mix weights and Low Utilization Payment Adjustment (LUPA) thresholds using CY 2021 data.
Other changes in the HH Proposed Rule include implementing mandatory CPI-based inflation updates to home-infusion therapy services payment rates and updates to the Expanded Home Health Value Based Purchasing (HHVBP) Model. CMS is also including a Request for Information (RFI) seeking feedback on health equity measures for the Home Health Quality Reporting Program (QRP) and the potential future application of health equity measures in the Expanded HHVBP Model.
ESRD Proposed Rule
Under the ESRD Proposed Rule, the CY 2023 ESRD PPS base rate would increase by 3.1% to $264.09. CMS estimates that total payments under the ESRD PPS for CY 2023 would be $8.2 billion as a result of the increase.
The ESRD Proposed Rule would also rebase the ESRD bundled market basket for CY 2023 to a 2020 base year with a labor-related share of 55.2%. The wage index floor would increase from 0.5 to 0.6 and CMS would apply a permanent 5% cap on decreases in the wage index (similar to the cap under the HH Proposed Rule described above).
The ESRD Proposed Rule also includes RFIs seeking feedback on quality indicators for home dialysis patients and principles for measuring healthcare quality disparities.
A copy of the HH Proposed Rule is available here, and the accompanying CMS Fact Sheet is available here. A copy of the ESRD Proposed Rule is available here, and the accompanying CMS Fact Sheet is available here.
