Medicare Plans to Reduce Payments to Home Health Agencies by $280 Million

The Biden administration released a proposed payment rule on Wednesday that would result in a 1.7% decrease in overall Medicare payments to home health agencies in 2025, totaling $280 million less than in 2024. The proposal by the Centers for Medicare & Medicaid Services includes a 2.5% payment increase of $415 million, but this would be offset by a 3.6% payment cut of $595 million.

This proposed payment rule also includes a “proposed permanent behavior adjustment” based on the assumption that home health agencies may have altered their billing and coding practices in the past to maximize reimbursements. This adjustment would further reduce payments to home health agencies.

The goal of these proposed changes is to ensure that Medicare payments to home health agencies are appropriate and reflect the actual services provided to beneficiaries. The Biden administration is seeking input from stakeholders and the public on the proposed payment rule before it is finalized.