Adapting to the 2024 Home Health Payment Rule with DME

Understanding the intricacies of the 2024 Home Health Payment Rule with Durable Medical Equipment (DME) is paramount for healthcare providers to navigate the evolving landscape of reimbursement, coverage policies, and regulatory requirements. This knowledge equips providers with the insights necessary to adapt their billing and coding practices, anticipate changes in payment rates, and strategically plan for the impact of permanent adjustments.

Therefore, in a rapidly evolving healthcare environment, a nuanced understanding of these regulations empowers providers to optimize financial management, ensure compliance, and maintain the delivery of quality care.

Let’s break down the critical points in the 2024 Home Health Payment Rule with DME:

• Understand the Home Health Payment Update

Proposal: The Centers for Medicare & Medicaid Services (CMS) initially proposed a 2.7% increase in home health payments in 2024.

Offsetting Adjustments: This proposed increase faced offsets, including a 5.1% decrease in the permanent behavior assumption adjustment and a 0.2% decrease due to the fixed-dollar loss ratio.

Final Update: The final rule resulted in a more modest increase of 0.8% in home health payments for 2024.

• Prepare for Patient-Driven Groupings Model (PDGM)

Proposed Adjustment: The rule suggests a permanent, prospective home health payment rate adjustment. This adjustment aims to account for the impact of implementing the PDGM, a payment model that classifies home health episodes into different groups based on patient characteristics and care needs.

• Review Home Intravenous Immune Globulin (IVIG) Items and Services

Demonstration Program End: The demonstration program for Home IVIG items and services is set to conclude on December 31, 2023.

CAA, 2023: The Consolidated Appropriations Act, 2023 establishes permanent coverage and payment for these items and services starting from January 1, 2024.

• Evaluate Rate Changes for Rural and Non-Contiguous Areas

No Rate Changes for Rural Areas: Rates for rural areas will remain unchanged.

Continuation of Blended Rates: The 50/50 blended rates will persist, balancing rural and non-rural areas.

Termination of 75/25 Blended Rates: However, the 75/25 blended rates in non-rural areas are slated to be terminated after the conclusion of the current year.

• Stay Informed on the Proposed DME Rule

Inclusion of DME Proposals: The CMS proposed a rule encompassing various aspects of Durable Medical Equipment (DME) billing and coding. This includes orthotics and braces, lymphedema care products, and DME refills.

• Prepare for Medicare Fee-for-Service Payment Rates

Decrease: A 2.2% decrease in Medicare fee-for-service payment rates is proposed, impacting the reimbursement rates for healthcare services provided to Medicare beneficiaries.

• Adjust for Permanent Rate Cut

Percentage: A permanent rate cut of 5.63% is introduced. This signifies a lasting reduction in the reimbursement rates for covered services.

• Navigate Market Basket Update and Productivity Adjustment

Market Basket Update: A 3.3% market basket update is proposed. The market basket represents the average cost of goods and services providers purchase. This update reflects changes in the costs of providing care.

Productivity Adjustment: However, this market basket update is reduced by a 0.3% productivity adjustment, which accounts for the expected increase in efficiency in the delivery of healthcare services.

• Leverage Net Increase in Home Health Payments

Amount: Despite the proposed decrease in Medicare fee-for-service payment rates and the permanent rate cut, there is a net $140 million, or 0.8%, increase in home health payments in calendar year 2024 compared to the previous year.

• Incorporate Permanent Prospective Adjustment

Percentage: A permanent prospective adjustment of minus 5.653% is applied to the CY 2024 home health payment rate. This adjustment is likely related to broader changes in the healthcare landscape, and providers need to factor this into their billing and coding processes.

• Comply with Hospice Enrollment Provisions

Fingerprinting Requirement: The rule introduces several provisions regarding hospice enrollment, including the requirement to fingerprint all owners with a 5% or more significant stake in hospices. This is likely a measure to enhance transparency and accountability in hospice ownership.

• Prepare for In-Home Administration Coverage

Effective Date: Beginning on January 1, 2024, the rule establishes permanent coverage and payment for the items and services needed for in-home administration of Home IVIG. This indicates a recognition of the importance of home-based care for specific medical interventions.

Wrapping Up!

The 2024 Home Health Payment Rule with DME Medical Billing and Coding involves complex changes in reimbursement rates, adjustments, and coverage policies. Healthcare providers must carefully navigate these provisions to ensure accurate DME billing and coding, adapt to new payment models like PDGM, and understand the implications of adjustments to Medicare fee-for-service rates.

Additionally, the termination of specific blended rates and the introduction of fingerprinting requirements for hospice enrollment add further complexity that providers must address in their administrative DME billing and coding processes. However, there is an alternative to such complexities, i.e., outsourcing to an experienced DME billing and coding company such as 24/7 Medical Billing Services.

See also: Turning Challenges Into Cash Flow: DME AR Collection Efficiency Tips