CMS Releases 2025 Home Health Final Rule & Quality Update

The much-anticipated 2025 Home Health Final Rule was posted Friday, November 1, 2024, and includes applicable changes for implementation in calendar year (CY) 2025 and beyond. These changes include routine, annual updates to the Home Health Patient Driven Groupings Model (PDGM) rates as well as rate updates for disposable Negative Pressure Wound Therapy (dNPWT) devices and for IVIG items and services that begin January 1, 2025. In addition to payment updates, the Final Rule includes changes to the Home Health Quality Reporting Program (HHQRP), finalizes a new Condition of Participation standard, and summarizes CMS’ plan to integrate health equity into the Expanded Home Health Value Based Purchasing (HHVBP) Model.

PDGM PAYMENT RATE CHANGES FOR 2025

The changes to reimbursement rates for 2025 include a permanent behavioral adjustment decrease of – 1.975 percent, which is applied to the base payment rate and impacts all 30-day payment periods. The market basket inflation update includes a 3.2% increase less a 0.5% productivity adjustment to total the final net update of 2.7 percent increase. The 2025 National standardized 30-day period base payment rate is set at $2,057.35 (up from $2,038.13 in 2024); base payment rate is approximately $50 less for agencies that do not submit quality data.

Medicare fee-for-service claims are paid under PDGM, with each patient’s case mix assignment based on five grouping categories: Admission Source, Timing, Clinical Grouping, Functional Impairment, and Comorbidity Adjustment. Functional impairment, Comorbidity adjustment, and case mix weights were recalibrated as mandated, based on the most recent applicable claims data available. These changes will impact over all payments for 2025, not only because of the change to the base payment rate, but also because of the recalibration of the above-mentioned categories that group the patient into one of the 432 Home Health Resource Groups (HHRGs) used to assign case mix weight.

For CY 2025 PDGM payment calculations, Comorbidity Subgroups will include 22 Low Comorbidity adjustment subgroups and 97 High Comorbidity adjustment interaction subgroups. There have been changes to these classifications, including the removal of the Respiratory category from the Low adjustment which include COVID-19 and related diagnoses.

The Functional Impairment point assignments, which are based on responses to OASIS items, were adjusted based on 2023 data. This is to ensure that, as designed, each Low, Medium, and High classification represent approximately one third of home health periods.

LUPA thresholds were also adjusted as required. For 2025, we find that eight (8) case mix groups have a decline in their LUPA threshold of a single visit. As a reminder, if the LUPA threshold for a 30-day payment period is reached, the agency will receive full 30-day period payment. If not reached, the agency is paid a per-visit rate for the visits completed in the 30-day period. The per-visit rates were updated for 2025 using the 2024 LUPA per-visit payment rates and applying a wage index budget neutrality factor and the 2.7% inflation factor, resulting in a slight rate increase.

If a LUPA 30-day payment period is the first and only 30-day payment period, an additional LUPA add-on factor rate is applied that increases payment for the Start of Care visit only. The add-on factor accounts for higher-than-average visit lengths for the Start of Care visit. This add-on factor is multiplied by its corresponding LUPA per visit rate, per discipline to total the higher payment rate. In addition to the add-on rates – 1.7200 for SN, 1.6225 for PT, 1.6696 for SLP, for the first time a unique add-on for OT was established at 1.7238.

Core-Based Statistical Area CBSAs were also revised; 54 counties that are Urban for 2024 will change to Rural in 2025. 54 Rural counties will change to Urban in 2025, as well. Numerous counties are being moved to different CBSA classifications and some CBSA classifications have been renamed and/or restructured.

NON-PAYMENT UPDATES

For HHQRP, CMS finalized a collection of changes to assessment items scheduled for 2027. These changes include plans for new Social Determinant of Health (SDoH) items: one will address the patient’s living situation, two will address food situations, and one will address utilities. The current Transportation item we have in OASIS E is also scheduled for modification in 2027. These changes will allow CMS to develop statistical tools to continue progress with the aim of cost reduction while improving the quality of care for all beneficiaries. Of note, these changes will not be part of the OASIS E1 update in January 2025, therefore anticipating another OASIS update in 2027.

CMS finalized the removal of the suspension of OASIS all-payer data collection meaning the collection and submission of OASIS data for all patients admitted under the Medicare-certified agency will begin as scheduled. Agencies must submit OASIS data for all patients, regardless of payer, beginning July 1, 2025, and may voluntarily submit beginning January 1, 2025. We recommend beginning the OASIS all-payer data collection and submission process prior to the required date to ensure that processes, export schedules and staffing levels have been addressed well ahead of the requirement deadline.

Home Health agencies now have a new Condition of Participation standard that was finalized in the 2025 Final Rule. This standard will appear at 484.105(i), and is titled Acceptance to Service Policy. This new standard requires the agency to develop, implement, and maintain an acceptance-to-service policy that is applied consistently to each prospective patient referral. This policy must address at a minimum:

• The anticipated needs of the referred patient
• The home health agency’s case load and case mix
• The home health agency’s staffing levels and
• The skills and competencies of the home health agency’s staff.

The goal of the Acceptance to Service Policy is to improve the referral process and reduce care delays by helping ensure referring entities and potential patients can select the right agency based on their care needs.

Another inclusion in the Final Rule is an expansion of the definition of a “new provider or supplier” to include those reactivating their Medicare enrollment and billing privileges. This change allows CMS to include these providers and suppliers in the Provisional Period of Enhanced Oversight (PPEO) used to detect and deter Medicare fraud, abuse, and waste.

Lastly, the Final Rule included summaries of comments on CMS’ RFI related to future performance measure concepts for the Home Health Value Based Purchasing Model as it plans to integrate health equity approaches in future HHVBP measures.

Home Health Agencies should stay alert for announcements from your software vendors about changes to functionality as they engineer their solutions to include these changes in regulation. Be sure to allow time for training on new processes related to the Final Rule in the coming weeks so that you are ready for survey, for sending clean claims and for submission of OASIS data on all patients, regardless of payer, in 2025.

Healthcare Provider Solutions offers a full range of services to help cover any gaps caused by staffing or training needs and will provide ongoing updates in the weeks ahead. Should you need assistance further understanding the Home Health Final Rule, please reach out to us.

On Friday, November 22, join Melinda A. Gaboury, CEO, as she provides an in-depth review of the 2025 Final Rule, from 12:00 to 1:30 p.m. This webinar will provide a detail review of the 2025 Final Rule in Home Health. To register for this webinar, click here.

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