CMS Finalizes 2.5% Increase in Home Health Payments for 2025
The Centers for Medicare & Medicaid Services (CMS) finalized a 0.5% increase in home health payments for 2025, replacing a previously estimated 2.7% increase. This adjustment adheres to the implementation of the Patient-Driven Groupings Model (PDGM) centered on patient needs, seeing an overall 2.2% increase in physician fees and a 1.8% decrease in the national 30-day payment rate.
This final payment rule also includes changes to the Home Health Quality Reporting Program (HHQRP) and the HH Value-Based Purchasing Program (HHVBP) that will take effect in 2025 and beyond.
Market Basket and Payment Updates
CMS finalized a 2.2% increase to home health payment rates for 2025. This follows a 2.7% market basket update minus a required 0.5% productivity adjustment.
In addition, the final rule includes a 1.8% decrease to the national, standardized 30-day payment rate. This adjustment directly reflects the finalization ofISOStringthe permanent behavioral offset. This adjustment accounts for the differences between actual and hypothesized behavior changes related to CMS’s implementation of a new PDGM model. Combined, all payment updates equate to a 0.5% increase for 2.
CMS also finalized inefficient wage index adjustments, shifting
Away from
with a 2.5% increase.
The new payment model accounts for the citations.
Changes in Functionality Carry Over to Further Reporting
CMS finalized several changes to the reporting requirements for 💖home health agencies. This includes updating the OASIS data collection to start using the start of care (SOC) time point for non-Medicare/non-Medicaid patients. The updated reporting process requires data be collected from the first assessment, alone or after January 1, 2025 for Phase I and July 1, 2025 for
Focus on Equity and Enhanced Reporting for HHVBP
Client engagement was a key theme throughout
newState F voluntary reporting program, effective from January 1, 2025
加强数据收集,以更好地理解医疗保健的社会决定因素
• 生活状况在2025年，CMS还会实施新的报告指标Cy2027年开始。" They are considered final for
enhances
The new rule introduces a series of modifications to the HHVBP model moving forward. CMS is finalizing.
starting in CY 2027
CMS finalized the adoption of new OMB delineations affecting area wage indexes for CY 2025. These changes result in urban CBSAs becoming rural and rural CBSAs becoming urban. The agency highlighted specific changes in a series of tables outlining county-level details.
CMS finalized the use of a fixed 35% loss ratio when determining outlier payments for 2025.
New Measures Introduced For 2025
CMS finalized the addition of a definitive OT-specific LUPA add-on factor and discontinuing the use of the PT LUPA add-on as a proxy. The new factor aligns with the payment methodologies for physical therapy, skilled nursing and speech-language pathology. The OT LUPA add-on factor is set at 1.7238.
CMS finalized and Several inclusion in Medicare provider enrollment regulations aim to prevent fraud, waste,
How might the lower-than-expected payment increase impact home health providers’ ability to recruit and retain qualified staff, given ongoing workforce challenges?
## Interview with a Home Health Expert on 2025 Payment Changes
**Host:** Welcome back to the show. Today we’re discussing the CMS’s recent final rule on home health payments for 2025. With us is Alex Reed, [Alex Reed Title/Affiliation], who specializes in home health policy. Thank you for joining us, Alex Reed.
**Alex Reed:** Thanks for having me.
**Host:** So, CMS has finalized a 0.5% increase in home health payments for 2025. This is significantly lower than the initially estimated 2.7% increase. What are your thoughts on this change?
**Alex Reed:** The reduced increase is certainly a disappointment for many home health providers. As the final rule explains [[1](https://www.cms.gov/files/document/mm13411-home-health-prospective-payment-system-cy-2024-update.pdf)], the adjustment is primarily due to the implementation of the Patient-Driven Groupings Model (PDGM) and its impact on payment rates. The 1.8% decrease in the national 30-day payment rate directly reflects this model’s behavioral offset, which accounts for the difference between projected and actual behavioral changes after PDGM’s introduction.
**Host:** Can you elaborate on the significance of the PDGM and how it’s affecting payments?
**Alex Reed:** The PDGM, a value-based payment system, shifts focus from volume to patient needs. It groups patients based on clinical characteristics and functional needs, aiming to ensure a more accurate reflection of the complexity of care provided. While beneficial in the long run, its rollout has led to some unforeseen payment adjustments, contributing to the lower-than-expected increase.
**Host:** The news release also mentions changes to quality reporting programs. Can you tell us more about those?
**Alex Reed:** Yes, CMS has made modifications to the Home Health Quality Reporting Program (HHQRP) and the HH Value-Based Purchasing Program (HHVBP). These adjustments are designed to enhance the effectiveness of these programs, encouraging continuous improvement in the quality of care delivered to home health patients.
**Host:** What are the overall implications of this final rule for the home health industry?
**Alex Reed:** The 0.5% increase, while minimal, provides some financial stability in the face of ongoing inflation and workforce challenges. However, the industry continues to advocate for policies that ensure fair and adequate reimbursement for the vital care home health professionals provide. We will continue to monitor the impact of these changes and work towards solutions that support both patient well-being and the sustainability of home health services.
**Host:** Thank you for shedding light on these important changes, Alex Reed.
**Alex Reed:** My pleasure.
