CY2023 Home Health Final Rule Breakdown

The CY2023 final rule for Home Health brings many updates and policy changes in the coming year. Tune into our latest fireside chat with Tom and Jennifer Maxwell of Maxwell Healthcare Associates to learn more about what to expect in the coming year.

Discussing the Final Rule and Preparation for 2023 with Jennifer and Tom Maxwell

Jennifer and Tom Maxwell, Co-Founders of MHA, sit down for a special fireside chat. They’ll discuss the Final Rule, issued by the Centers for Medicare and Medicaid Services that includes updates and policy changes for Medicare payments under the Physician Fee Schedules, effective January 1 2023. They’ll unpack the final rule and provide guidance on what your agency can do to prepare for 2023. The following is a high-level transcription of their chat. Listen to the full podcast to hear the full conversation.

Final Rule

TOM: I’m going to give you my impetration of the rule and then we can discuss things you need to be thinking about as an organization. We all got the rule on Halloween, and it was quite an impact and quite a change. Everybody came out and said that we’ll get a 7.8% cut and then it turned out we got a little less of a cut from CMS. But they did put in disclosures that this was a small percentage of the future cuts that will be coming. So, we do believe that we’re not out of the woods yet.

As far as the rule, they proposed a 7.6% permanent rate adjustment. They came back to us and said that they’ll reduce that by half. And essentially, it’s a 3.92% reduction. It’s way better than almost 8% but not as good as we were hoping for.

Behavioral Adjustments

When they put out the PDGM rule, they said agencies are going to change their behaviors. You were going to do less therapy visits, you were going to code differently, you were going to change your behavior. So, that behavioral adjustment was really based on CMS’ prediction on what you were going to do. What they forgot to do is factor in that we were going to be in COVID. If you look at the home health and hospice community, home health agencies were still seeing patients. We were still caring for nanas and papas in the home when doctor offices were closed. Somebody had to continue to care for these patients. So, what CMS forgot to do was evaluate the behavioral adjustments.


One positive thing about the rule is that we don’t have to complete an OASIS on every single patient. The proposed rule that came out it said that the government was going to force you to do an OASIS on every patient regardless of the payor. They have delayed that portion of the rule. They saw the impact that was going to cost and the impact to agencies. But do know that it’s coming in 2025. It did not delay OASIS-E. So that’s still coming. If you’re not ready for it already, you need to start getting ready for it. As of November 2nd, you have 60 days to get ready for

LUPA Threshold

They modified the LUPA threshold. When you modify the LUPA threshold, you’re essentially saying, “What does it take to become a LUPA?” How many visits does it take to become a LUPA? You need to be working with your EMR to understand the rules around LUPA threshold modification. If you don’t, there’s going to be times you think you’re doing the right amount of care that the patient needs, and instead you could be reimbursed somewhere in the range of $1800 less than what you thought.

Behavioral Change

Home Health Value-Based Purchasing (HHVBP) – 12:43

They expanded the Home Health Value-Based Purchasing. Look at that. That’s going to become important. They also put out a new conforming regulation change out 484.350 B & C. That’s part of the Medicare handbook.

G Codes – 13:06

They’re also requesting that G Codes be added in. The G Codes are related to care that’s bring provided virtually, telephonically, or a combination. Essentially, the government is saying that we know that people are providing telehealth, telemedicine, and remote monitoring. If you’re doing that, you’ll have to add in a specific G Code that says you did a visit remotely, via a phone call or via remote patient monitoring.

G Codes/Reimbursement – 13:35

Remember, they are not changing the reimbursement. Those visits (virtual visits) do not count as visits. Those visits do not count toward your LUPA thresholds. Those visits do not count toward your outlier thresholds. If you’re doing 14 visits for a patient and you do one of them virtually, then you’re still doing 13 visits for that patient. It doesn’t count as 14 visits.

EMR providers need to get ready for that. They’re sending the data collection and the G Codes will begin voluntarily on January 1st of 2023. But they will be mandatory on claims as of July 2023. That’s six months away and you’ll need to be ready to send those G Codes in.

Payor Profitability – 16:31

We’re starting to take a long time looking at this. It’s one thing to say that they’re going to pay me $150/visit and it’s going to cost me $120/visit. I’m going to make $30 a visit. But the back office burden of that contract costs me $200 and I just lost a lot of money. We’re trying to understand the back office burden for each payor, what the profitability for each payor is, and understanding how difficult it is to take that particular insurance plan. It’s no different than when you go to the doctor – the first thing your doctor asks you is, “Who’s your insurance payor?” The hospitals have specific fee schedules. And they’re trying to figure out on how to care for each patient appropriately and not go out of business. The payor profitability that Maxwell is looking at examines the raw data, pulling out the actual effort that it takes to see these patients, as well as the costs for that effort, and figure out if the reimbursement rate you’re getting from the payor is appropriate and makes you profitable.

JENNIFER: Not only is it about payor profitability strategies itself but we’re finding that this is an opportunity for contract renegotiation. Many times, organizations we work with typically don’t monitor their contract strategies. We do need to get ready and prepare for a potential burden. Having these conversation upfront, and leveraging data analysis, benchmarking Trella data to show where you are at a country, state and national level to be able to prove your case to these payors and show that you’re providing the best quality outcomes is going to be super important going forward.

OASIS – E Preparedness – 19:47

TOM: It’s going to be super important that your team understand the impact of OASIS-E. Value-based case measures are coming. That’s part of the OASIS-E strategy. Have you taught your QA/QI people your OASIS review.

Don’t forget about those tweener episodes. These are episodes that started in OASIS-D and ended in OASIS-E. What’s your reporting look like when you look at your quality reporting? Make sure you’re training your staff on OASIS-E and on the validations that are being built in the software.

JENNIFER: What we’re seeing is that now is the time to develop your QAPI program. And we know that a lot of clients across the nation feel the pressure of the QAPI component and not having a full team dedicated to it is detrimental. Begin to look for a partner in the space to help you with your QAPI program. Don’t hesitate to reach out to us. We have a good QAPI program as well as an ongoing trained to proficiency to help you build up your QAPI team.

LUPA Management

TOM: Take time to understand why people are missing visits. On average across the industry, 10% of all visits are missed. If we can eliminate that and get that down to 3-5%, then we can help mitigate these rate cuts. Mitigation of missed visits is something every organization should focus on. The other part of missed visits is that every time you miss a visit, you must write an order for it. That’s another order the doctor must sign. And now the doctor has SOC to sign, and a couple medication orders to sign, supply orders to sign, and missed visit orders to sign. You just frustrated that physician because they must sign all these orders because your team was unable to go to these visits. Focus on your missed visit strategy and it’ll help you save some money.

Provider Optimization

How often are we sending an RN to a visit when we could have had an LPN there instead? There are tools in each of these EMRs that help you with this. Or how often are you sending in a physical therapist when I could have just sent a physical therapist assistant? We used to call this working to the top of your license. The big part of the strategy focuses on how we send the right caregiver to the home in order to optimize the care for the patient as well as your revenue.

Centralization – 26:15.48

Centralizing the back-office process is key. Look into the people in the branches that are working with the nurses on case conference, in-care management of those patients. The person in the back office whose doing the 485 workflow and the evaluation documentation workflow, the orders processing workflow, all those things that involve the approval process, those people’s jobs are crucial and important to your organization. If you investigate the number of workflows that get pilled on these individuals, it will actually upset you. Focus on how to remove unnecessary obstacles for the clinical field staff supervisor or that person in your organization who’s doing that workflow and doing nurse care. Focus on making their jobs easier while remaining compliant. Centralization is a big focus for Maxwell.

JENNIFER: This correlates to agencies being businesses as well. The impact of that clinician not being able to get that workflow pushed through or address claims submission really impacts your DSO. And that in turn impacts pay roll, and that impacts paying potential bonuses for clinicians that go above and beyond. And that impacts the business. Agencies need to learn how to optimize, automate and centralize the business.

Time to Home

After you get the patient through the referral process we do the eligibility check, we load their medication, we can get their H&P from the hospital and we’re ready to go see that patient. How long does it take for us to go see that patient? Everything we can do under Six Sigma Lean project to remove barriers from that is super important. Time to home is an area that we spend a lot of time studying. We can look at your data and start picking out factors to understand why this is happening. Speed to admission is important, not only for the patient but for the agency as well.


Recruiting comes from a culture inside your organization. Are you spending enough time training your staff? Do they understand their job? Do they understand the role of their jobs? Recruiting and retention of your staff is important.

This was a high-level transcription of Jennifer and Tom’s fireside chat on the CMS’ Final Rule, released on November 1, 2022. Portions of the transcriptions were left out for conciseness. Subscribe to our podcast to hear the full conversation.

CY2023 Home Health Final Rule Breakdown

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