The Centers for Medicare & Medicaid Services (CMS) has unveiled its final rule outlining payment rate adjustments and policy updates for Home Health Agencies (HHAs) in 2025. While CMS initially proposed a 2.7% increase, the final rule reflects a more modest 0.5% increase, translating to approximately $85 million compared to 2024. This adjustment takes into account a behavioral offset and other payment modifications.
The final rule also encompasses significant changes to the Home Health Quality Reporting Program (HHQRP) and the HH Value-Based Purchasing Program (HHVBP) for 2025 and beyond.
Payment Adjustments: A Closer Look
Table of Contents
- Payment Adjustments: A Closer Look
- Payment Rate Adjustments
- Wage Index Updates
- Home Health Quality Reporting Program
- home Health Value-Based Purchasing Model
- Home Health Conditions of participation
- greater Transparency for Home Health Services
- Continued Respiratory Illness Tracking in Long-Term Care
- Expert Guidance Available
CMS finalized a 2.2% increase in home health payment rates for 2025, stemming from a 2.7% market basket update minus a 0.5% productivity adjustment. Though, a 1.8% decrease to the national, standardized 30-day payment rate, reflecting the full permanent behavioral adjustment, tempers this increase. This adjustment accounts for discrepancies between anticipated and actual behavioral changes following the implementation of the Patient-Driven Groupings Model (PDGM).
“We are finalizing half of the adjustment, 1.975% in CY 2025,” CMS stated, addressing concerns raised during the comment period. This follows two previous reductions totaling 6.815% to account for the permanent adjustment needed.
CMS also finalized several other payment updates, including:
- A budget neutrality factor of 1.0039 for CY 2025 PDGM case-mix weights.
- A fixed-dollar loss ratio of 0.35 for determining outlier payments.
- A dedicated occupational therapy (OT) low utilization payment adjustment (LUPA) add-on, replacing the previous practice of using the physical therapy (PT) LUPA add-on factor as a proxy. The OT LUPA add-on factor is finalized at 1.7238.
- A separate payment for disposable negative pressure wound therapy, set at $276.57 for CY 2025.
- A $430.99 payment rate for Intravenous Immune Globulin items and services.
For detailed data and to access the complete final rule,visit the Federal Register.
The Centers for Medicare & Medicaid Services (CMS) has unveiled its final rule for Medicare home health payments in 2025, outlining key adjustments to payment rates, wage indexes, and quality reporting requirements. The rule aims to ensure equitable access to quality home healthcare while promoting value-based care.
Payment Rate Adjustments
For calendar year 2025, CMS finalized a 2.5% increase to the home health payment update, resulting in a base payment rate of $420.48. This adjustment reflects the agency’s commitment to supporting home health providers while ensuring the sustainability of the Medicare program.
Wage Index Updates
CMS adopted updated core-based statistical area (CBSA) delineations from the Office of Management & Budget (OMB), impacting area wage indexes. These changes resulted in some urban CBSAs becoming rural and vice versa, considerably affecting payment calculations for home health agencies in various regions.
The final rule includes detailed tables outlining these changes, including:
- Connecticut’s request to replace its eight counties with nine planning regions
- Urban counties transitioning to rural status
- Rural counties becoming urban
- Changes to urban CBSA names and numbers
- Urban areas subsumed into other CBSAs
- Counties switching to new or modified urban CBSAs
- Counties requiring transition codes
CMS opted against phasing in these wage index changes, believing its existing 5% annual cap on adjustments is sufficient.
“We believe that the current annual 5 percent cap on any wage-index changes is sufficient to mitigate the impact of these changes on home health agencies,” CMS stated in the final rule.
Home Health Quality Reporting Program
CMS is introducing four new quality measures, modifying one existing measure, and updating the OASIS all-payer data collection.These changes reflect the governance’s ongoing focus on addressing social determinants of health.
The new measures, focusing on living situations, food security, and utilities access, will be implemented starting in calendar year 2027.CMS also finalized modifications to the transportation item to align with existing quality reporting programs for inpatient psychiatric facilities and inpatient care.
Additionally, CMS finalized a change to the data collection process, requiring the use of the start-of-care (SOC) time point for non-medicare/non-Medicaid patients. This change aims to improve data accuracy and consistency.
home Health Value-Based Purchasing Model
CMS is exploring new performance measure concepts for the Home Health Value-based Purchasing (HHVBP) model, including measures related to family caregiver support, falls with injury, Medicare spending per beneficiary, and functional outcomes. The agency is also committed to integrating health equity concepts into the expanded HHVBP model, considering measures that address disparities in care for underserved communities.
Home Health Conditions of participation
CMS finalized a requirement for home health agencies to establish a clear acceptance-to-service policy. This policy aims to address variations in the initiation of home health services and ensure agencies only accept patients they can adequately serve.
“We believe this policy will help ensure that home health agencies only accept patients for whom they have reasonable expectations of being able to meet their needs,” CMS stated.
The policy requires agencies to consider factors such as caseload,staffing levels,and the skills and competencies of their staff when making acceptance decisions.CMS emphasizes that this policy is intended to complement existing acceptance policies, not replace them.
In a move aimed at increasing clarity and improving patient care, the Centers for Medicare & Medicaid Services (CMS) has finalized new reporting requirements for home health agencies and long-term care facilities.
greater Transparency for Home Health Services
CMS has mandated that home health agencies publicly disclose detailed information about the services they provide. This includes outlining any limitations on specialty services, specifying the typical duration and frequency of care, and clearly communicating any restrictions due to staffing variations. ”This requires home health agencies to make limitations due to variations in staffing to further inform the referral sources,” the CMS rule states.
Continued Respiratory Illness Tracking in Long-Term Care
Recognizing the ongoing importance of monitoring respiratory illnesses, CMS has decided to extend and refine reporting requirements for long-term care facilities. starting January 1, 2025, facilities will continue to submit weekly reports through the National healthcare Safety Network (NHSN). This reporting will encompass COVID-19, influenza, and RSV, and will include key data points such as facility census, resident vaccination status for these illnesses, confirmed resident cases, and the number of residents hospitalized due to these respiratory illnesses.
“CMS finalized the continuation of the weekly reporting through NHSN and electronic reporting about COVID-19, influenza, and RSV in a standard format,” the agency announced.
Expert Guidance Available
For home health agencies seeking clarification on these new regulations and their impact, CLA’s healthcare team is available to provide expert guidance. With deep knowledge of regulatory,policy,and payment changes across the healthcare spectrum,CLA can help providers navigate these evolving requirements and ensure compliance.
Learn more about CLA’s healthcare expertise here.
This content details various updates and changes implemented by the Centers for Medicare & Medicaid
Services (CMS) for Medicare home health payments in 2025. Here’s a breakdown of the key takeaways:
**Payment Rate Adjustments:**
* **Finalized Increase:** A 2.5% increase to the home health payment update for 2025,resulting in a base payment rate of $420.48.
* **2024 Update:** CMS initially proposed a 2.7% increase, but after considering a behavioral offset and other payment modifications, the final rule reflects a more modest 0.5% increase, translating to approximately $85 million compared to 2024.
**Wage Index Updates:**
* **CBSA Changes:** CMS adopted updated core-based statistical area (CBSA) delineations from the Office of Management & Budget (OMB), impacting area wage indexes for home health agencies.
* **Impact:** Some urban CBSAs became rural and vice versa, significantly affecting payment calculations.
**Home Health Quality Reporting Program (HHQRP):**
* **New Measures:** CMS is introducing four new quality measures focusing on social determinants of health like living situations, food security, and utilities access.
* **Measure Modification:** One existing measure is modified.
* **Data Collection:** Updates to the OASIS all-payer data collection process, including using the start-of-care (SOC) time point for non-Medicare/non-Medicaid patients.
**Home health Value-Based Purchasing (HHVBP) Model:**
* **New Measure concepts:** CMS is exploring new performance measure concepts,including family caregiver support,falls with injury,Medicare spending per beneficiary,and functional outcomes.
* **Health Equity:** The agency is committed to integrating health equity concepts into the expanded HHVBP model.
**Conditions of Participation:**
* **Acceptance-to-Service Policy:** CMS finalized a requirement for home health agencies to establish a clear policy regarding accepting patients, ensuring they can adequately serve them.
**Additional Changes:**
* **Other Payment Updates:** CMS finalized several other payment updates including a separate payment code for disposable negative pressure wound therapy, a dedicated low utilization payment adjustment (LUPA) add-on for occupational therapy, and a fixed-dollar loss ratio for determining outlier payments.
The complete final rule and detailed data can be accessed on the Federal Register: [Insert Link Here]
