December 2, 2024  –  The recent home health final rule has left a significant concern for providers with the potential for clawbacks of payments deemed overpayments by the Centers for Medicare & Medicaid Services (CMS). This issue stems from adjustments related to the shift to the Patient-Driven Groupings Model (PDGM), with CMS estimating a $3.5 billion overpayment from 2020-2022, a figure that has now escalated to $4.5 billion overall.

Dr. Steve Landers, CEO of the National Alliance for Care at Home, expressed concerns during a recent media briefing, describing the looming billions in repayments as “unthinkable” given the sector’s existing financial pressures. 

CMS also has yet to release a detailed plan for when or how it will collect these funds, leaving providers in a state of limbo. William A. Dombi of the National Alliance for Care at Home, said earlier this month that, “CMS has, once again, said they are not going to collect on that adjustment at this point in time. They’ve not published any kind of schedule, or even criteria for determining a schedule. As this debt grows, we begin to wonder whether it will ever be capable of being collected without decimating the home health benefit under the Medicare program.”

Advocacy groups like the National Alliance for Care at Home and The Partnership for Quality Home Healthcare (PQHH) have been actively lobbying to mitigate these cuts. Joanne Cunningham, CEO of PQHH, remains hopeful that relief could come from a congressional package by year-end, reflecting ongoing efforts to revise the PDGM legislation. The advocacy continues despite CMS finalizing its methodology two years ago, amidst ongoing litigation and congressional displeasure with the resulting deep cuts.

Impact on Providers and Broader Implications for the Industry 

The threat of clawbacks is prompting providers to reconsider their operational strategies. Cleamon Moorer, Jr., president and CEO of American Advantage Home Care, highlighted the potential for significant workforce impacts, noting that budget constraints could affect crucial staffing roles. Looking ahead, Moorer disclosed that American Advantage Home Care is contemplating a shift to a not-for-profit model to widen funding avenues through grants and alternative funding methods.

The home health sector is at a crossroads, with the scale of potential repayments posing a threat to the sustainability of services. As providers like American Advantage explore restructuring and broadening funding mechanisms, the industry faces a crucial period of adaptation. The possibility that CMS may eventually choose not to enforce these clawbacks offers a glimmer of hope, yet providers must prepare for all outcomes, including prolonged periods of flat payment rates as suggested by Dombi.

As the situation evolves, the home health community remains vigilant, ready to adapt to new regulatory landscapes while continuing to deliver essential care services. The outcome of these clawbacks will likely shape the financial and operational foundations of home health care for years to come.