On November 1, 2024, the Centers for Medicare & Medicaid Services (CMS) has issued its Calendar Year (CY) 2025 Home Health Prospective Payment System Final Rule (CMS-1803-F), reducing the initially proposed 4.067% cut to a final 1.975% rate reduction. While this adjustment lessens the immediate impact, ongoing rate cuts under the Patient-Driven Groupings Model (PDGM), first implemented in 2020, continue to strain access to essential home health services and threaten agency sustainability.

Industry leaders express concern that CMS’s reductions jeopardize both patient access and agency viability. Dr. Steven Landers, CEO of the National Alliance for Care at Home, remarked, "CMS somehow views declining access to home health services, closures of hundreds of agencies, tens of millions fewer visits, and reduced Medicare spending on home health as ‘budget neutral.’ Lowering the proposed rate cut may slow the decline somewhat, but we need CMS to stop dismantling this essential service."

Since 2020, cumulative rate reductions have significantly impacted home health providers:

• 2020: 4.36% behavioral adjustment cut
• 2023: 3.925% reduction
• 2024: 2.89% cut

With a temporary adjustment burden exceeding $4.46 billion, agencies argue these cuts are unsustainable and risk limiting patient care access.

Key Provisions in the 2025 Final Rule

The 2025 rule includes:

• Inflation Update: Net increase of 2.7% (3.2% Market Basket Index minus a 0.5% productivity adjustment) to address inflationary pressures.
• 30-Day Payment Rate: Base PDGM 30-day payment rate set at $2,057.35, up from $2,038.15 in 2024.
• Alleged Overpayment: CMS reported a cumulative alleged overpayment of $4.46 billion from 2020-2023, with no collection scheduled in 2025.
• Case Mix & Wage Index Adjustments: Recalibrated case mix weights and modified wage index values include budget neutrality adjustments.
• Low Utilization Payment Adjustment (LUPA) Add-On Changes: Revised LUPA add-on factors for each qualifying discipline, such as nursing and physical therapy.
• Social Determinants of Health (SDoH): New assessment items, such as living situation and food access, will be mandatory starting January 1, 2027. CMS is also considering additional equity measures for the Home Health Value-Based Purchasing (HHVBP) Model.
• Home Health Quality Reporting Program (HHQRP): SDoH assessment items will be required in 2027 to align with CMS's goal of capturing health determinants across patient populations.
• Data Collection: Starting July 1, 2025, data collection at the start of care time point will become mandatory, improving patient assessments.
• Conditions of Participation: Providers must publicly disclose service capabilities and limitations, ensuring transparency and appropriate capacity for patient care.
• Disposable Negative Pressure Wound Therapy (dNPWT): Separate payment of $276.57 for dNPWT devices in 2025.
• Home Intravenous Immune Globulin: Updated payment rate of $431.83 for 2025.
• Provider Enrollment Changes: CMS expanded the definition of “new provider or supplier” to include reactivating entities, which will face enhanced oversight.

Call for Congressional Intervention

To halt further cuts, bipartisan legislation — the Preserving Access to Home Health Act of 2023 (S.2137/H.R.5159) — has been introduced. This bill would pause rate reductions, stabilize home health agency funding, and require the Medicare Payment Advisory Commission (MedPAC) to assess PDGM’s impact on care access before any additional adjustments. Home health professionals are urged to contact their members of Congress to support this essential legislation to preserve access to affordable, high-quality home health care.

Click here to access HCAF’s Legislative Action Center and quickly reach your elected officials to voice your support for protecting home health services.