New Medicare Payment Method Causing Cuts to Home Health Care Services

Medicare Payment Method Causing Cuts to Home Health Care Services

A new payment method for Medicare providers is making it harder for some home health care patients to receive physical, occupational, or speech therapy. Under the new system, providers are refusing to cover some therapy services.

On January 1, 2020, the federal Centers for Medicare and Medicaid Services (CMS) instituted a new way of paying home health care providers, called the Patient-Driven Groupings Model (PDGM). Previously, provider payments were based on the amount of therapy delivered. The PDGM requires payments to be based on a complicated formula that takes into account a patient’s medical condition, the extent to which the patient is impaired, and whether the patient was hospitalized. In addition, CMS now pays providers in 30-day periods of care, rather than the earlier 60-day periods.

In response to this new system, providers are slashing therapy services, according to Kaiser Health News, which found that therapists are being laid off, being asked to decrease services, or are incorrectly telling patients that services aren’t covered. There are also fewer incentives for home health providers to treat patients who need long-term therapy.

While providers have reacted to the new payment system by cutting services, CMS sent a letter to providers reiterating that actual coverage for services has not changed. As long as a patient meets the conditions for receiving home health care under Medicare regulations, the patient should get home health care services, including therapy. Home health care agencies shouldn’t ignore physician orders, CMS maintained.

If you encounter coverage problems, contact the Center for Medicare Advocacy or an elder law attorney.

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