2025 Home Health Final Rule: CMS Reduces Cuts, Revises CoPs, and More Updates
The U.S. Centers for Medicare and Medicaid Services (CMS) released the 2025 Home Health Final Rule on November 1, 2024. The rule includes a significant change from the proposed version released in June, increasing overall payments by 0.5 percent instead of cutting payments by 1.7 percent.
The payment increase replicates a process that has occurred several times over the past few years, in which proposed cuts have been reduced due to extensive advocacy efforts by the National Alliance for Care at Home, APTA, NARA, and other industry advocates. This trend highlights the impact and importance of industry engagement on payment levels and other key priorities for home health organizations and providers.
Legislation has been introduced in the Senate and House (bills S 2137 and HR 5159, respectively) that would fully restore funding to home health. We urge providers and organizations to reach out to their lawmakers and encourage them to support and advocate for this legislation.
The new home health payment rule does implement some negative payment changes, including a permanent prospective adjustment of -1.975 percent, which CMS has stated is to account for the impact of implementing the Patient-Driven Groupings Model (PDGM) payment model. While this adjustment is half of what was proposed, home health advocates are concerned that CMS may be unintentionally reducing access to home health services for Medicare beneficiaries, contributing to high referral rejection rates and exacerbating an already difficult staffing situation in the setting.
Historically, payment in home health was highly dependent on traditional Medicare; however, cuts to Medicare and lower rates offered from Medicare Advantage plans have created a business situation different from the analysis provided by the Medicare Payment Advisory Commission (MedPAC), which fails on an annual basis to account for the full payment picture in home health.
Changes to the Home Health Conditions of Participation
CMS has also finalized updates to the home health conditions of participation (CoPs) with the aim of reducing avoidable delays to patient care by requiring a new patient acceptance-to-service policy for each agency. The policy would need to address capacity, anticipated needs of the referred prospective patient, the agency’s caseload, case mix, staffing levels, and skills of agency staff. Agencies would need to ensure the policy is applied consistently with patients and would need to make accurate information publicly available regarding the services offered by the agency and any limitations on specialty services.
Long-term care advocacy group LeadingAge released a statement disagreeing that the policy will increase patient access to care. “Without any request for information (RFI) to understand the problem, or any analysis of its data to identify the root cause of agencies’ turning down requests for care, CMS finalized additional administrative burdens to home health agencies,” said Katie Smith Sloan, president and CEO of Leading Age, noting, “This will not yield the desired result.”
Home Health Quality Reporting, OASIS, and Value-Based Purchasing Updates
As part of the OASIS 2025 update, CMS is adding four measures to the social determinants of health (SDOH) category in OASIS—living situation, utilities, and two items related to food security. These items will take effect in 2027. The current transportation measure will also be modified beginning in 2027.
CMS is also finalizing changes to Low-Utilization Payment Adjustments (LUPAs), establishing an OT-specific LUPA add-on, and will be providing an OASIS “crosswalk for mapping OASIS-D data elements to the equivalent OASIS-E data elements.”
For more information, you can access the 2025 final rule and fact sheet here:
