Understanding the FY 2023 Hospice Final Rule and the Home Health Prospective Payment System Rate

By Lauren Corcoran | August 15, 2022

The Centers for Medicare and Medicaid Services (CMS) recently released the FY 2023 Hospice Final Rule and Home Health Prospective Payment Rate which determines what the rules and regulations will be for agencies in the upcoming fiscal year.

hospice agencies projected annual rate increasing to 3.8% and home health prospective payments decreasing to 4.2%Post-acute providers have expressed concern about the proposed annual rates and how these changes will impact them, especially with the rise of inflation and the ongoing pandemic.

With the hospice proposed rule moving upwards by 3.8 percent, and the home health prospective payment decreasing by 4.2 percent, your organization will want to ensure it is eligible for the highest reimbursement possible.

It’s crucial to understand how your sales and marketing team can adapt their Wha processes to ensure success in 2023, what the changes mean for your agency, and how your team can properly prepare.

Now more than ever, agencies need to look for ways to maximize ROI by creating meaningful connections with the right referral sources.

What Do the FY 2023 Final and Proposed Rule Changes Mean for My Agency?

Home Health Prospective Payment System Rate

CMS predicts that Medicare payments to home health agencies will decrease by 4.2 percent, there will be a 2.9 percent increase in Medicare payments, a 6.9 percent cut to balance PDGM, and a 0.2 percent cut for outlier payments.

CMS anticipates that the 2023 prospective payment would cut aggregate home health payments by 4.2 percent or $810 million.

This figure takes into account a 2.9 percent Medicare payment increase, a 6.9 percent cut to balance out PGDM as well as a 0.2% cut related to outlier payments.

To add to the tension of rising Medicare payments, home health providers have been fighting since late June to help a bill get passed through Congress preventing CMS from reducing home health payments this year through 2026.

“So, 40% of the providers will go into a negative margin if the [rule holds],” Ken Albert, the CEO of the Maine-based Androscoggin Home Healthcare + Hospice, said on a panel at NAHC’s Financial Management Conference on July 25, 2022. “This isn’t about some whining and complaining about having a little less in our pockets. This is about access to quality home health care.”

Now more than ever, you must ensure that your sales team connects with suitable referral sources and improves productivity. Preparation is key to meet these challenges.

Hospice Final Rule

Projected annual rate for Hospice Agencies is increasing from 2.7% to 3.8%The 2.7 percent projected annual rate for hospice agencies caused waves throughout the post-acute care industry. CMS recently announced they were increasing the annual rate to 3.8 percent, but in the eyes of agencies and others in the post-acute care industry, it’s an inadequate improvement.

Bill Dombi, President of the National Association for Home Care and Hospice, stated:

 “While we believe the 3.8 percent update will help address the financial pressures hospices are experiencing, we have continuing concerns that it will not fully address current cost inflation and will seek support for further increases that would cover the increasing labor and other costs affecting hospice providers.” 

In addition, the updated payment has an aggregated cap that hinders the overall patient payments made to hospice agencies annually.


Patient to Hospice Payment Cap. Year 2022: $31,297.61 increasing to Year 2023: $32,486.92


Getting The Most Out of the New Regulatory Changes

Sales leaders who are feeling the pressure to maximize growth and profitability are finding that high-quality market data is the key for their sales reps to find the right referral sources and get the most out of the final rule and the Prospective Payment Rate.

One of the best ways to do this is to have processes, tools, and technology in place to provide your sales and marketing team visibility into the highest-margin referral sources available. It’s important for your agency to not only find the patients with whom you can provide the best care, but also identify the patients who can drive the most profitable reimbursement opportunity.

Rebecca Molesworth, VP of Product at Trella, shared how its Marketscape platform is helping agencies optimize their efforts.

She stated:

“We [Trella], have been working really hard on a way that can help you maximize the team you have, give them the support they need, and really help them engage the market to help grow your business in these challenging times.”

Having the right resources and technology implemented for your post-acute care agency not only helps find and retain the best referral sources, but also helps tackle the upcoming regulatory changes.

Connecting with the “Right Patient” is More Important Than Ever

Though these proposed rates will not be implemented until January 1, 2023, it is never too early to start preparing. Creating new processes for your referral targeting strategies is key, and Trella is assisting agencies like yours increase ROI and save valuable time for sales and marketing teams.

If you are interested in seeing this in action, you can request a FREE Sales Spotlight report for one physician in your market.

Sales Spotlight is just one tool inside Trella’s Marketscape Platform, along with a mobile-first CRM, market share insights, competitive analysis, and more, to help your agency locate and connect with the right patients.


Hospice Final Rule - Sales Spotlight Offer


About the Author:

Lauren Corcoran, Marketing Content Writer

As a marketer and creative writer, Lauren is thrilled to create Trella Health’s marketing content. After graduating from Ohio Wesleyan University with a bachelor’s degree in Marketing, Lauren worked as a content specialist for a cybersecurity firm, video production company, and has experience in sales. With the ongoing pandemic, she decided to take a leap and work in post-acute care at KanTime Healthcare, an EHR. At Trella Health, she’s able to do the two things she loves most: marketing and writing, while making an impact in the post-acute care industry.