Home healthcare providers are very interested to learn if a year-end congressional spending bill will provide financial relief for 2022. Their focus is on “health care extenders,” which keep money directed toward Medicare beyond a previously-determined cutoff date. In this article, we examine why the extenders are important this year, where things currently stand in the negotiation process, and how a final decision could impact HCBS providers.
Importance This Year
In prior years, health care extenders have typically been used to direct money toward facilities in rural areas or those serving impoverished patients. However, this year’s extenders would help maintain staffing flexibilities and workforce funding put in place at the height of the COVID-19 pandemic.
Providers with Medicare beneficiaries consider this a “higher stakes” issue in 2022 due to several factors:
- Labor shortages and supply chain issues continue to negatively impact delivery of services;
- Requests for HCBS grew significantly during the first two years of the COVID pandemic; however, a shortage of workers currently leaves healthcare providers unable to meet demand.
- Although the shift to HCBS was initially expected to financially benefit larger providers, a significant proposed cut to Medicare payments in 2023 could undermine income projections.
Current Negotiation Status
Negotiations for the year-end bill containing the proposed health care extenders have been moved to a “lame ducks” session. At the same time, lawmakers have chosen not to “repurpose” unused funding from the American Rescue Plan bill to offer home healthcare providers relief.
As a result, some nursing homes have said they will be forced to close, citing financial losses coupled with a 77% occupancy rate. Some home health industry members are considering a lawsuit designed to stop the proposed cuts—while pursuing legislative options that would delay cuts through 2026.
The Centers for Medicare and Medicaid Services (CMS) have stated that nursing homes and home health providers were overpaid prior to the pandemic, and the adjustments to payments intended to rectify the reimbursement error were delayed during the initial stages of the COVID-19 outbreak. Now, CMS and the Medicare Payment Advisory Commission are both looking to reduce payments to balance what they see as a past “overpayment” for home healthcare.
Impact To HCBS Providers
Without the health care extenders in place, Medicare home health providers could see up to $810M in cuts next year. This, providers warn, will force agencies to decrease their areas of coverage and patient visits.
Although some expect CMS will work to mitigate the sudden cuts by changing the timeline somewhat, others believe their best hope is the three-year payment delay, which could still be inserted into the year-end spending deal.
Notably, the proposed health care extenders at issue only apply to short-term recovery and discharge care. Long-term services and supports (LTSS) requires a rehaul as well, which could leave home health in a better position to offer cost-effective services than facilities.
Updates on the year-end spending bill will likely be available in December, and we’ll be watching closely to see where Congress lands. In the meantime, you can read the industry-backed bills proposed in the House of Representatives and the Senate for more information.