CMS is proposing to increase the wage index of low wage index hospitals. Why does that matter to rural home health agencies?

Sharon Hamilton MS, RN, CFDS
Clinical Consultant – Briggs Healthcare

Under PDGM home health referral sources will matter. PDGM will change the way each patient’s case-mix weight is calculated and introduce a new variable, which healthcare setting did the patient utilize in the 14 days prior to the home health admission. This is significant because, CMS will pay a higher rate for the first 30-day payment period when the patient’s referral source is institutional. Based on that fact, it is reasonable to believe rural home health agencies will want to form closer relationships with rural hospitals. However, there is a problem.

According to a report, published in February 2019 by Navigate Consulting, 21% of rural hospitals nationwide are at high risk for closing due to insolvency. The CMS proposed payment changes are aimed at bringing stability to communities were rural hospitals struggle from inequities. Efforts such as this can’t come soon enough to ensure Medicare beneficiaries have greater access to healthcare, rural hospital remain solvent and serendipitously giving home health agencies an opportunity to secure the more profitable hospital referrals.

To read more about the CMS proposal follow the link below.

https://www.cms.gov/newsroom/fact-sheets/fiscal-year-fy-2020-medicare-hospital-inpatient-prospective-payment-system-ipps-and-long-term-acute