Why Home Health Agencies Could See an Unfavorable Medicare Payment Landscape in 2023

Home health operators should dig in even further ahead of the Medicare reimbursement battle coming later this year.

The U.S. Centers for Medicare & Medicaid Services (CMS) released its 2023 proposed payment rule for the nursing home industry earlier this month. In it, the agency called for a 3.9% increase to Medicare payments for skilled nursing facilities (SNFs) – with a 4.6% cut to the Patient-Driven Payment Model (PDPM).

Broadly, CMS says the downward adjustment to PDPM is to make up for the payment overhaul’s unintended payment boost to SNF operators. Nursing home advocates, however, claim the proposed cut would be damaging to an already beleaguered corner of health care.

“Any reduction in government resources could deepen the economic crisis currently within the long-term and post-acute care sector,” Mark Parkinson, president and CEO of the American Health Care Association (AHCA), said in a statement. “Many nursing homes already face imminent closure, and this Medicare cut could force more seniors across the country to relocate and find alternative care farther away from family and loved ones.”

Historically, SNFs have been the canary in the coal mine for home health agencies. What CMS does in the former, it often tries to do in the latter.