ICYMI: CMS Adopts Final Home Health Rule, Plus Further Explanation of Market Basket Change

Situation Report | November 2, 2020

The U.S. Centers for Medicare and Medicaid Services (CMS) last week issued its final rule for 2021 home health payments. See here.

As we noted in an alert to members on October 30, CMS estimates that Medicare payments will increase 1.9 percent, or $390 million nationally, distinct from CMS’s proposed rule which estimated a 2.6 percent increase (or $540 million). This change was a result of CMS applying more recent data in the market basket index.

According to CMS, the final rule includes a 2 percent home health payment update percentage ($410 million increase) and a 0.1 percent decrease in payments due to reductions in the rural add-on percentages (a $20 million decrease).

More Info on Market Basket Change

CMS notes that the first quarter 2020 forecast used for its initially proposed market basket increase was developed prior to the economic impacts of the COVID-19 public health emergency (PHE). This lower update (2 percent) for 2021, relative to the proposed rule (at 2.7 percent), is primarily driven by slower anticipated compensation growth for both health-related and other occupations as labor markets are expected to be significantly impacted during the recession that started in February 2020 and throughout the anticipated recovery, CMS says.

Other Payment, Program Changes

The rule adopts revised delineations for the wage index as well as the originally proposed 5 percent cap on wage index decreases. It also finalizes the Medicare home infusion therapy supplier enrollment and services payment rates, which excludes home infusion therapy services from home health services.


The rule appears to include telehealth provisions reflecting language that CMS implemented during the public health emergency, but without direct payment support for telehealth. CMS will allow use of telecommunications technologies under the Medicare home health benefit as long as the service is included on the plan of care, does not substitute for an in-person home visit, and it still cannot be considered a visit for the purpose of patient eligibility or payment.

In a related matter, as we reported earlier this week, both houses of Congress have introduced legislation that would provide Medicare telehealth reimbursement to home health agencies. We also sent members an advocacy campaign to urge Congressional support for this bill: S.4854/H.R.8677, the Home Health Emergency Access to Telehealth (HEAT) Act. Please click here to act on that campaign today.

This is just a preliminary summary. HCA will provide more details on the above items and other provisions of the rule in a forthcoming memo.

Please register here for HCA’s CHHA Member Forum on November 19 where we will discuss the rule and other items of importance to our CHHA membership.