A federal court on Friday dismissed a lawsuit against the Health and Human Services Department and the Centers for Medicare and Medicaid Services over Medicare home healthcare payment calculations.
The U.S. District Court for the District of Columbia ruled the National Association for Home Care and Hospice failed to exhaust all possible administrative fixes before filing a lawsuit, since it skipped an agency process for seeking expedited review of a new reimbursement method.
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CMS introduced a new way to calculate Medicare home health pay rates through the Patient-Driven Groupings Model in 2020. The model ties reimbursements to patient characteristics and CMS said it would reduce unnecessary care and discourage providers from upcoding Medicare claims.
The association sued the Biden administration last summer over that change as CMS reduced payments 3.9% in fiscal 2023. The agency also proposed 2.2% pay cut for fiscal 2024, but ultimately increased home health payments a modest 0.8%. However, the agency has threatened to claw back overpayments due to a behavioral adjustment in the payment model.
The trade association challenged the method the agency used in making the cuts.
Although the federal court sided with HHS, National Association for Home Care and Hospice President William Dombi called the decision a “minor setback” and said the association would continue to challenge the pay method.
