Home Health Proposed Payment Cuts Place Spotlight On Provider Innovation


With a potentially unfavorable home health final payment rule looming over providers’ near future, it’s more important than ever to innovate.

That was one of the key takeaways from a recent WellSky webinar on the home health proposed payment rule.

“Given the reality of the fact that CMS conceives us as making so much more money than we’re making,” Cindy Campbell, director of operational consulting at WellSky, said during the webinar.“As our demand for service increases, our ability to provide the service is going to bank on our ability to innovate.”

In June, the U.S. Centers for Medicare & Medicaid Services (CMS) released its home health proposed payment rule for 2024. The proposal includes a 2.2% reduction in Medicare fee-for-services payments for next year and a 5.653% permanent rate cut.

Providers were given a 2.7% net inflation increase, or about $460 million. The actual cost inflation is around 5.2%, according to WellSky.

“We feel that this is not adequate relative to the coverage of our inflated costs for wages etc., and so this will be fodder for many comments,” Campbell said.

Overall, providers are seeing the lowest base rate since 2021.

“That just doesn’t jive with what I’m seeing out there … relative to your costs going up, labor costs going up, etc.,” Campbell said. “We know that there’s a disconnect here, in terms of perception of our profitability.”

Campbell believes that it’s important to remember that the impact on providers could mean a weakened ability to deliver care to seniors.

“I think about who is attached to this care, I always ground myself in that true north,” she said. “Let’s think of the people we serve, and our ability to do it with excellence, and let’s go advocate.”

One of the ways that providers can lean into innovation is by normalizing the use of predictive data and analytics, Campbell noted.

This means applying analytics to workforce support and capacity management solutions.

Embracing innovation also means providers incorporating virtual care into care delivery models.

It’s also important to “integrate intelligent care management,” according to Campbell.

“How can we achieve the best outcome within the most efficient use of resources,” she said. “First of all, make sure that we’re lifting what we should do appropriately, like establishing OASIS competence, rather than reacting to a lack of it and constantly trying to clean it up.”

Aside from establishing OASIS competence, providers can integrate real-time, predictive analytics to guide QAPI performance improvement projects and triage daily schedule to risk.

“Let’s use data to guide us, let’s use data to lead, let’s use data to push back on CMS with advocacy,” Campbell said. “Let’s use every tool we can in our toolkit, and tell Congress to stop these cuts if we can.”