Home Health & Hospice Week

When your LUPA percentage is higher than usual, it's time to play Sherlock Holmes to get to the root of the potential problem.

Low utilization payment adjustments (LUPAs) under the home health prospective payment system can be extremely financially punishing to home health agencies. That's because when a patient's episode drops under five visits, home health agencies are paid a low per-visit rate instead of the entire episode amount.

Dollars and cents: For example, the base epi-sode amount for fiscal year 2006 is $2,264.28 while the per-visit rate for skilled nursing is a mere $98.85 (see Eli's HCW, Vol. XV, No. 7). If you furnish an episode with four skilled nursing visits, you'll receive almost $1,870 less than for a five-visit episode.

All HHAs will have some unavoidable LUPAs, experts note. The key is making sure you head off quality and financial problems at your agency by being on guard against unnecessary LUPAs.

Ask Yourself This Question

When agencies find their LUPA percentage is higher than average, it's time to ask some piercing questions about care delivery, urges consultant Karen Vance with BKD in Springfield, MO. "Are patients getting what they need from your agency?" Vance asks.

Consider these six steps when examining your LUPA level:

1. Compare yourself to your peers. For example, all Missouri Medicare agencies had a median LUPA rate of 12.85 percent in 2003, according to a report compiled by BKD from cost report data for that year. Freestanding agencies in that state saw a median LUPA rate of 11.08 percent.

Where to find it: HHAs can obtain benchmarking reports from a variety of companies (including a report offered by Eli Research and BKD).

If your LUPA numbers are average, you may not need to investigate further, Vance offers. But if they are high or low, looking into the matter may head off or correct major problems.

2. Examine the acute care hospitalization rate. A high percentage of LUPAs may indicate that your patients aren't receiving the care they need to stay out of the hospital, Vance warns. If you find a high LUPA rate, your next step should be to go to Medicare's Home Health Compare Web site and see where your hospitalization rate falls.

If your acute care hospitalization rate is high too, that's a red flag that you should examine your care delivery methods to ensure patients are getting the right services--and enough of them--to keep them out of the hospital.

3. Check out PEPs. Another danger sign is when your partial episode payment (PEP) adjustment rate is high, Vance cautions. A high LUPA rate and PEP rate combined could mean your patients aren't receiving enough care, so they come back to your agency within the 60-day episode or go to another HHA in the same time period. Both scenarios trigger a PEP adjustment.

Examples: In 2003, all Missouri Medicare agencies saw a median PEP rate of 2.19 percent, while freestanding agencies experienced a 2.44 percent median PEP rate, according to the BKD report.

Again, if your PEP rate is high in conjunction with an elevated LUPA rate, you should investigate your care delivery practices to ensure they are adequate, Vance recommends.

4. Double-check billing procedures. Some-times HHAs bill LUPAs accidentally because they miss including visits in the episode. "Make sure the total number of visits is reflected in the claim," Vance advises.

Therapy visits are especially apt to get missed, because their documentation is often turned in by outside contract staff, billing experts warn.

5. Assess patient mix. Sometimes a high LUPA rate may be explained by patient mix. If you have many patients on service who require once-a-month catheter changes, for example, you'll usually see more LUPAs, Vance explains.

Your agency can gauge what patient mix and percentage of LUPA patients it can afford based on its reimbursement, experts note.

6. Tighten up documentation. Sometimes an agency's LUPA rate is pumped up because medical reviewers at the intermediary are denying visits in episodes with low visit numbers, bumping those episodes down to LUPAs. Be aware that billing a high number of episodes that barely exceed the LUPA threshold may put you squarely on the intermediaries' medical review radar screens.

Good idea: If you see a lot of medical review resulting in LUPAs, make sure clinical documentation in such episodes is beyond reproach, experts advise. 

Note: For information on Eli's 2006 Home Health Operations Dashboard, which includes the agency, local, regional and national benchmarks discussed in this article, call 1-888-779-3718 x326 or email dashboard@eliresearch.com.