2023 Trends in Home Health Billing

2023 is shaping up to be a year of change for home health billing and home health coding. This means revenue cycle leaders will see clear benefits from familiarizing themselves with these changes and working to get in front of the shifts that are influencing the home health billing and coding space.

To help you get the best results this year, we’ve curated this list of trends in the home health revenue cycle.

The Medicare Fee-For-Service Environment Will Get More Challenging
Proposed cuts have dominated the reimbursement conversation for 2022, and 2023 is shaping up to look very similar.

The Centers for Medicare and Medicaid Services (CMS) didn’t implement proposed cuts under the final rule, but it is taking action on plans to recoup perceived overpayments under PDGM while at the same time kicking off permanent rate adjustments. This reflects a general attitude (one that’s shared by the Medicare Payment Advisory Commission) that home health agencies are overpaid. Providers have reasonably pushed back in the age of COVID, arguing that they are still burdened with staffing issues, increasing bottom-lines, and rising inflation.

One area of hope is the omnibus spending bill which was passed in December 2022 and which requires CMS to be more open in how it makes decisions. According to Home Health Care News, legal action could even be an option of last resort [1].

Expect to see increased demands in complexity for home health billing and home health coding.

Home Health Referrals Increase as Patient Conditions Become More Complex
As Baby Boomers continue to transition into their older years, expect to see increased burden on home health, to the point it outpaces the capacity that home health providers have to offer.

A 2022 report from WellSky found that, as of May 2022, home health referrals had exploded to 123% of their levels in 2019. This, of course, was in part because of the COVID-19 public health emergency, which has made home health services useful for infection control and increased the demand as people are dealing with the impact of infections. While you shouldn’t expect to see referrals stay as high as they have, know that there is still significant room for growth. This is especially true since the shift to home health is supported by legislation like the Choose Home Care Act of 2021, which enjoys bipartisan support.

But staffing issues persist. Home health referral rejections jumped to 71% because of a lack of staff capacity. If providers aren’t able to fix staffing issues, increases in demand won’t make much of a difference, even if patients are sicker. Obesity increased 11% in 2022 for SNF residents while the complications of diabetes and hypertension rose 34% and 25% respectively. These increasingly complex patients mean that home health agencies are under more pressure to adjust to the Home Health Value-Based Purchasing (HHVBP) Model, which went into effect on January 1, 2023 [2].

HHVBP Will Activate Value-Based Care
Providers who haven’t moved on value-based care will likely be pushed to action by Home-Health Value-Based Purchasing (HHVBP).

The first performance year has arrived, and it’s ringing in what looks like the permanent status for value-based agreements for home health providers. Prominent minds in the industry have already marked 2023 as the year that value-based care crosses the tipping point and goes mainstream. Humana, for example, has openly stated that home health is a core part of its value-based care strategy. At the same time, home health and hospice company, Aveanna, has stated its commitment to value-based care for the long-term [1].

While much of the industry has pushed back on the national expansion of HHVBP, the start was delayed, but revenue cycle leaders should expect to devote significant resources in 2023 to adjusting home health billing and home health coding practices to keep up with this changing reality.

OASIS-E Will Be Top of Mind
Home health coding is in for a significant upset as the most recent Outcome and Assessment Information Set (OASIS) revision takes hold. These changes will have a direct impact on your operations, trickling down to patient outcomes and the quality of care you’re able to offer.

Featuring 27 new items and removing old questions, the update to the dataset promises financial burden and uncertainty for home health agencies. Gone are the days of only reporting private insurance – in 2023, home health agencies will feel the burden of expanding OASIS to all patients. This means a direct impact to the results of your revenue cycle outcomes since payments and outcomes are impacted by OASIS data. But even providers who have kept up with the changes might be in for additional work. CMS has adjusted the OASIS 2023 impact on case-mix weights, so that, while agencies could accumulate 112 points, that number for 2023 is 109 points that would impact your case-mix weight [3].

For providers this means uncertainty, but they can prepare by improving efficiency in their home health billing and home health coding to optimize cash flows and revenue cycle outcomes where possible. 2023 will ultimately be a year where home health agencies are tested. The number of agencies has declined over the last 10 years and trends seem to be pointing to more of the same. But your agency doesn’t have to struggle the way others have. To learn more about the home health billing and home health coding, you’ll need to weather a year of change, start here.

[1] A. Donlan, “Top Home Health Trends For 2023,” Home Health Care News, 6 January 2023. Available: https://homehealthcarenews.com/2023/01/top-home-health-trends-for-2023/.
[2] P. Filbin, “Home Health Referrals Skyrocketed, Patients Became More Complex During Pandemic,” Home Health Care News, 14 September 2022. Available: https://homehealthcarenews.com/2022/09/home-health-referrals-skyrocketed-patients-became-more-complex-during-pandemic/.
[3] P. Filbin, “What Experts Are Saying On OASIS Payer Expansion, OASIS-E Implementation,” Home Health Care News, 11 November 2022. Available: https://homehealthcarenews.com/2022/11/what-experts-are-saying-on-oasis-payer-expansion-oasis-e-implementation/.

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