CMS on Monday finalized two separate rules that will increase payments to home health agencies (HHAs) and end-stage renal disease (ESRD) providers.

CMS reverses proposed payment cuts to HHAs

In June, CMS proposed a plan to reduce HHA reimbursements by $810 million in 2023 to correct $2 billion in overpayments that were made in 2020 and 2021 while the new Patient-Driven Groupings Model (PDGM) was implemented.

Home health industry groups opposed these proposed cuts and threatened to sue CMS if the agency implemented them as planned.

In the new final rule, CMS has reversed its decision on the proposed cuts. Instead, the agency will phase in payment reductions to account for HHA providers billing for the highest-paying codes under the PDGM.

"We recognize the potential hardship of implementing the proposed full permanent adjustment in a single year," CMS said. Half of the original proposed budget cuts will be implemented in calendar year (CY) 2023.

Overall, home health reimbursements will increase by 0.7%, or roughly $125 million, in CY 2023. This net update also includes a market basket update of 4.1%, a 0.1 percentage point productivity cut, and a 0.2 percentage point increase for outlier payments.

The final rule limits the amount CMS can decrease Medicare wage index payment reductions to 5%. It also establishes a benchmarking framework for the expanded Home Health Value-Based Purchasing Model. Regardless of when HHAs were Medicare-certified, all of them will use Jan. 1, 2022, as their baseline year.

Starting in 2025, HHAs will once again be required to submit outcome and assessment data for non-Medicare and non-Medicaid patients. Previously, CMS had suspended this data requirement for HHAs.

CMS finalizes payment increase for ESRD providers

CMS also finalized a rule updating payment rates and policies for the ESRD Prospective Payment System for renal dialysis services in CY 2023.

Under the final rule, CMS will increase the base rate paid for dialysis services to $265.57, an increase of $7.67 from CY 2022. Hospital-based ESRD providers will see an estimated 3.1% increase in payments while freestanding facilities will see a 3% increase.

Starting in 2023, CMS plans to permanently bar ESRD facilities from decreasing their workers' wages by more than 5% annually, regardless of reasons behind the decline.

CMS will suppress seven metrics, including a readmission ratio and the in-center hemodialysis consumer experience survey, from its quality improvement plan to account for the effects of the pandemic. Although CMS will collect and post this information, they will not be factored into payments. Instead, officials will use 2019 data for these measures for assessments.

Providers will also be required to report their employees' Covid-19 vaccination status next year. This data will be used as part of quality assessments beginning in 2025. In addition, CMS has finalized a plan to convert the standardized transfusion reporting measure to a clinical metric in 2025.

The agency also updated the scoring methodology and clarified the patient education services requirements in the ESRD Treatment Choices Model, a mandatory payment initiative that began in January 2021 and will continue through June 2027.

According to Modern Healthcare, this model was modified last year to incentivize providers to reduce disparities in home dialysis and kidney transplant rates. Currently, CMS does not believe the final rule will influence the model's net savings, which are expected to reach $28 million over its duration. (Kacik, Modern Healthcare, 10/31; AHA News, 10/31; CMS home health rule fact sheet, 10/31; Tepper, Modern Healthcare, 10/31; CMS ESRD rule fact sheet, 10/31)