Is CMS’ Proposed Home Health Rate Cut Legal? Other Court Decisions Suggest No

Home Health Care News / By Andrew Donlan
 
The entire home health industry is anxiously awaiting the release of the final payment rule for 2023, which should be released by the Centers for Medicare & Medicaid Services (CMS) at some point over the next two weeks.
 
The anxiousness is due to the home health proposed payment rule, which included a 4.2% aggregate decrease in payments – or $810 million – and an avenue for future CMS clawbacks of perceived overpayments to providers.
 
Industry leaders and stakeholders have advocated against those cuts relentlessly over the past few months. They’ve also tried to gain traction on legislation, namely through the Preserving Access to Home Health Act, which was introduced in both the Senate and House in the summer. The final route to avoid payment cuts would be through legal action, though multiple sources have told Home Health Care News in the past that they’d like to avoid that at all costs.
 
However, if they did decide to go that route, there is recent and mounting legal precedent to suggest that the courts would side with the home health industry and against CMS and its ability to make as drastic cuts as the ones put forth in this year’s proposed rule.
 
Multiple sources have also told HHCN that the following could be the under-the-radar tool that could save the home health industry from cuts, either now or later.
 
Prior to 2020, CMS proposed a series of policy changes for hospitals, one of which would have reduced payment for hospitals, specifically through the 340B drug pricing program. Broadly, 340B hospitals are generally those that serve lower-income or rural populations.
 
Those cuts represented an about $1.6 billion impact on those 340B hospitals annually.
 
That impact won’t be felt moving forward, though, because the U.S. Supreme Court ruled unanimously against CMS and the U.S. Department of Health and Human Services – and thus, against the rate cuts – in American Hospital Association (AHA) v. Becerra on June 15. 
 
In the hospitals’ case, they were going to see a significant and disruptive cut to reimbursement that they believed would hurt patient care. The same goes for home health providers and their looming potential cuts. Both believe CMS is not statutorily able to cut payments in the ways in which they did, or could be. In AHA’s case, they were ruled correct by the court.

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