Home Health & Hospice Week

If you’re waiting for a reprieve on no-pay RAPs that start Jan. 1, it’s time to stop and get on with preparing for the new process, experts advise.

The Centers for Medicare & Medicaid Services makes clear in the 2021 home health final payment rule that the new Requests for Anticipated Payment — which will have zero payment but have severe financial penalties for lateness — will go on as scheduled in the new year. As finalized in the 2020 rule, “for CY 2021, all HHAs will submit a ‘no-pay’ RAP at the beginning of each 30-day period to allow the beneficiary to be claimed in the [Common Working File] and also to trigger the consolidated billing edits,” CMS says in the rule published in the Nov. 4 Federal Register.

CMS forged ahead with the unpopular change in the face of strident criticism from commenters on the proposed rule (see HCW by AAPC, Vol. XXIX, No. 42). Under the requirement, CMS will penalize home health agencies when they file RAPs past the five-day deadline, deducting 1/30 of the billing period payment for each day the RAP is late.

“Submitting RAPs on such a short timeline and so often without any upfront RAP payment is already unnecessarily burdensome,” said Justin R. Hunter, Senior VP with Encompass Health, in the chain’s comment letter. “But the impact of the COVID-19 pandemic will make the 5-day submission timeframe even more difficult for many HHAs,” Hunter told CMS in the letter.

“The five-day submission window is arbitrary and the potential penalties coupled with a zero percent RAP and other pandemic-related effects will have very serious consequences to providers — including closure of home health agencies,” warned Illinois HomeCare & Hospice Council President Cheryl Adams in the trade group’s comment letter.

CMS generally dismissed such comments, noting that “most of the comments were out of scope of the proposed rule because we did not propose to make any changes,” according to the rule.

Shorter Timeline + No Pay = Raw Deal

CMS’ complete refusal to be flexible in its RAP approach wasn’t what many providers expected. “Agencies really thought this would be pushed back at least a few months to give them a chance to better prepare,” believes Lynn Labarta, CEO and founder of Imark Billing in Miami. “Surprise!”

Some home health agencies are hanging onto that hope, notes Lynn Olson, owner of billing company Astrid Medical Services in Corpus Christi, Texas. “There is an underlying feeling it will get put off again,” Olson tells AAPC.

But agencies had better come to terms with the idea that no-pay RAPs are going to happen, industry veterans advise.

“The no-pay RAP in 2021 is tough to swallow,” acknowledges Cindy Krafft, physical therapist and consultant with Kornetti & Krafft Health Care Solutions. It has “requirements that must be met (or get a financial penalty), but [agencies are] not getting paid for it” — at least “no more than what you would have in the end,” Krafft observes.

Confusion abounds about exactly how the no-pay RAP works, Olson points out. “There is a lot of conflicting information” coming from various sources, he notes.

A mix of the confusion and some providers’ lack of preparedness is likely to lead to a rough start. “The first quarter will be challenging,” Labarta predicts. “Specifically [for] the mom and pop agencies,” she says.

“I expect a pretty big impact initially,” says Sherri Parson with consulting firm QIRT, which has been acquired by McBee.

The effects from no-pay RAP-related billing and cash flow issues may be significant enough to trigger a greater volume of HHA sales, Labarta expects.

The no-pay RAP model “certainly changes the cash flow landscape that’s for sure,” notes reimbursement expert M. Aaron Little with BKD in Springfield, Missouri. It’s “quite possible that some owners/operators may feel it’s time to exit,” he predicts.

Unlike when the Patient-Driven Groupings Model began this year, HHAs won’t have COVID-19 relief funds to bail them out. “The effects of PDGM on agencies was at least somewhat mitigated by grants and loans related to COVID-19 that many agencies received in 2020,” observes Washington, D.C.-based healthcare attorney Elizabeth Hogue. “It’s unlikely that the effects of PDGM will be mitigated in any way in 2021, so every dollar counts,” Hogue stresses.

The prospect of this reimbursement change is “scary,” says Nick Seabrook with BlackTree Healthcare Consulting in King of Prussia, Pennsylvania.

However, agencies shouldn’t count themselves out just yet.

“Home health will quickly adjust when they realize the financial impact of not making the five-day deadline,” Parson believes. “We have been a resilient industry and have sometimes been slow to adjust with initial changes, but we quickly figure it out,” she says.

“Agencies quickly adapt,” Labarta maintains. “Most will be able to meet the requirements,” she predicts.

Note: The final rule is at https://www.govinfo.gov/content/pkg/FR-2020-11-04/pdf/2020-24146.pdf.