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CMS 2024 Home Health Final Rule Released

The 2024 Home Health Final Rule was released on November 1, 2023, introducing a variety of updates. These changes, detailed in a comprehensive 531-page report, became effective on January 1, 2024. Here is a summarized overview of these updates.

PERMANENT BEHAVIORAL ADJUSTMENT The initial proposal of a 5.65% reduction in the rule has been modified. Following a reassessment, CMS has opted to implement only a 2.890% adjustment this year. This is partly balanced by a 3% increase in the Market Basket, leading to a small net increase.

Despite efforts to pass new legislation and legal challenges against CMS, there is continued dissatisfaction due to the persistence of the permanent behavioral adjustment.

FUNCTIONAL STATUS The Final Rule also revises functional status points, with reductions in points for:

M1820: Ability to Dress Lower Body
M1830: Bathing
M1860: Ambulation
M1033: Risk of Hospitalization (increased by 1 point)
CMS aims to maintain an equal distribution of 33% across low, medium, and high functional status categories, though high functional status remains predominant.

BASE RATES The proposed base rate for the CY 2024 National Standardized 30-Day Period Payment was $1,974.38, reflecting a 5.65% proposed cut. With the 2.89% behavioral adjustment and the 3% Market Basket increase, the new base rate is set at $2,038.13, showing an improvement from the initial proposal.

2024 LUPA FINAL RATES The LUPA (Low Utilization Payment Adjustment) rates are not affected by the base rate's behavioral adjustment and will see a full 3% increase due to the Market Basket. These rates are the basic rates and will vary based on the wage adjustments where a patient is cared for.


CASE-MIX WEIGHTS Recalibration of all 432 case-mix weights of the PDGM HIPPS codes has been completed using 2022 data. This recalibration is likely to significantly influence payment amounts and should be considered along with the base rate changes. Accurate and verbose documentation will be more important than ever before.

M ITEMS REMOVAL FROM OASIS-E The items “M0110 Episode Timing” and “M2200 Therapy Need” will be removed from OASIS-E starting January 1, 2025.


OUTLIERS The revision for the Fixed Dollar Loss (FDL) ratio for Outlier payment calculations has been released. In 2024, this will shift from .35 or 35% to .27 or 27%, affecting the agency’s cost absorption before triggering an Outlier payment.

LABOR SHARE Changes to the Labor Share were minimal due to the focus on the behavioral adjustment. The Labor Share will change from 76.1% to 74.9% in 2024. Payment calculations for agencies are based on a formula involving the base rate, case-mix weight, labor share percentage, and wage index. Agencies with a wage index below 1.0 will benefit from this change.

DISPOSABLE NEGATIVE PRESSURE WOUND THERAPY (dNPWT) Billing changes are applied to Disposable Negative Pressure Ulcer Wound Therapy. Previously billed under a 34x bill type, from January 1, 2024, it will be included in the home health claim. Nursing visits will be billed as routine, and dNPWT devices will be billed using HCPCS code A9272 at $270.09 per device.


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