CMS CY2023 Home Health PPS Rate Update 10/31/2022)

The Centers for Medicare & Medicaid Services (CMS) published the CY 2023 Home Health Prospective Payment System Rate Update final rule for home health agencies (HHAs) on October 31, 2022.


According to a CMS.gov Newsroom Fact Sheet (10/31/2022), “CY 2023 Home Health Prospective Payment System Rate Update and Home Infusion Therapy Services Requirements – Final Rule (CMS-1766-F):

  • Medicare payments to HHAs will increase in aggregate by $125 million compared to CY 2022.
  • This rule finalizes recalibration of the PDGM case-mix weights and updates the low utilization payment adjustment (LUPA) thresholds, functional impairment levels, comorbidity adjustment subgroups for CY 2023, and the FDL used for outlier payments. This rule also finalizes the reassignment of certain diagnosis codes under the PDGM case-mix groups.
  • CMS is finalizing a methodology to determine the impact of differences of assumed and actual behavior changes on aggregate expenditures, as well as a permanent prospective payment adjustment to the home health 30-day period payment rate to account for any increases or decreases in aggregate expenditures
  • The rule finalizes a permanent, budget neutral 5% cap on negative wage index changes (regardless of the underlying reason for the decrease) for home health agencies to smooth year-to-year changes in the pre-floor/pre-reclassified hospital wage index.
  • In this rule, CMS is finalizing recalibration of the case-mix weights (including the functional levels and comorbidity adjustment subgroups) and LUPA thresholds using CY 2021 data to more accurately pay for the types of patients HHAs are serving. 
  • In the CY 2023 HH PPS proposed rule, CMS solicited comments on the collection of data on the use of such services furnished using telecommunications technology on the home health claims (at the individual beneficiary level). Collecting data on the use of telecommunications technology on home health claims would allow CMS to analyze the characteristics of the beneficiaries utilizing services furnished remotely, and could give us a broader understanding of the social determinants that affect who benefits most from these services, including what barriers may potentially exist for certain subsets of beneficiaries. CMS plans to begin collecting this data on home health claims on a voluntary basis beginning on January 1, 2023 and on a mandatory basis beginning on July 1, 2023. Further program instruction for reporting this information on home health claims will be issued in January, 2023.
  • CMS is updating the home infusion therapy services payment rates for CY 2023 as required by law. The final home infusion therapy payment rate update for CY 2023 is 8.7%.

The Final Rule can be viewed in the Federal Register.

The CMS Fact Sheet contains full details on the rule and links with pertinent information as well.


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