Home Health & Hospice Week

Will you say good-bye to RAPs — and upfront payments?

A switch to a 30-day episode for home health may mean a lot more work for your billing department.

Under the newly proposed HH PPS revamp, you’ll end up submitting two Requests for Anticipated Payment and two End of Episode claims for patients who would formerly have required just one of each for a 60-day episode.

Thus, the Home Health Groupings Model will double your billing and collections workload, notes reimbursement expert Melinda Gaboury with Healthcare Provider Solutions in Nashville, Tennessee.

However, that may not be the case if many of your patients don’t make it to a second 30-day episode. In its 2018 HH PPS proposed rule released July 25, the Centers for Medicare & Medicaid Services says about one-quarter of current home health episodes conclude before the 30-day mark.

Potential change: Although CMS has proposed that HHGM take effect in January 2019, it is considering possibly eliminating RAPs at a later date. RAPs may be unnecessary with the shorter, 30-day episode and faster billing, CMS theorizes in the rule published in the July 28 Federal Register.

Dropping RAPs would mean that instead of receiving 60 percent (initial episode) or 50 percent (subsequent episodes) of your episode payment near the beginning of the episode, you’d wait until the final claim is submitted and processed to receive your full payment for the episode.

And dropping RAPs won’t necessarily lighten your billing load. That’s because CMS may instead require HHAs to submit a yet-to-be-developed “Notice of Admission” to get the episode into the Medicare claims system as fast as possible.

CMS would require HHAs to submit the NoA within five days of admission “to assure being established as the primary HHA for the beneficiary and so that the claims processing system is alerted that a beneficiary is under a HH period of care to enforce the consolidating billing edits required by law,” the agency notes in the rule.

Swapping RAPs for NoAs makes no sense, says billing expert M. Aaron Little with BKD in Springfield, Missouri. “Why create another nonpayable billing transaction like the hospice Notice of Election when we already have RAPs?” Little asks. “This would really alter the cash flow of agencies.”

Another change would come for Low Utilization Payment Adjustments. Instead of having to exceed a universal four-visit threshold to avoid the payment adjustment, the LUPA threshold would vary by HHGM group from two to seven visits (see Table 40 for individual group threshold numbers.)

Watch out: With the switch to 30-day episodes, second episodes would be vulnerable to LUPA adjustments, predicts finance expert Pat Laff with Laff Associates in Hilton Head Island, South Carolina.

30-Day Rate Setting Questionable

CMS spends a good deal of space in the rule justifying 30-day episodes by showing that much of HHAs’ utilization is front-loaded. About 25 percent of episodes’ services are over by 30 days, CMS’s data analysis shows.

But when it comes to setting a rate for the 30-day episode, CMS doesn’t think reimbursement should be front-loaded as well. “We believe our proposal to start with the national, standardized 60-day episode payment amount, add back in NRS conversion factor amount, and then divide the sum by two is a reasonable estimate of the cost of a 30-day period of care,” CMS says in the proposed rule.

“In its March 2017 Report to Congress, [the Medicare Payment Advisory Commission] highlighted that home health payments have consistently and substantially exceeded costs because agencies are able to reduce the number of visits provided and cost growth is generally lower than the annual payment updates for home health care,” CMS adds.

The first episode should be weighted more heavily, industry veterans counter. “From our submissions we can confirm more visits are accomplished during the first half of the episode,” says billing expert Lynn Olson, owner of Astrid Medical Services in Corpus Christi, Texas. “Likewise, one would expect that a 30-day episode is more intensive and therefore should be reimbursed accordingly — like maybe 60, 65 percent of the current 60-day episode.”

Olson offers this analogy: “An airplane takes off and climbs to 40,000 and lands at its destination 500 miles later. Takes off again, same scenario, accomplishing a 1,000 mile flight; a second plane takes off climbs to 40,000 and completes the same flight without the stop. Which crew had the greater workload, and which plane used the most fuel?”