Home Health & Hospice Week

Take these 4 steps to protect your agency.

The Patient-Driven Groupings Model contains sweeping changes. Don’t let one of the most important reimbursement revisions — to Low Utilization Payment Adjustments — get lost in the shuffle.

A crucial concept home health agencies must understand about the new payment model taking effect in January is “the impact that PDGM will have on LUPAs,” stresses Rick Ingber with VantaHealth Consulting in Ardmore, Pennsylvania.

PDGM’s effect on LUPAs is big because “with a 30-day billing period, there is a likelihood of a substantially higher number of LUPAs during the second 30-day billing period,” Ingber tells Eli. Previously, the second-period LUPA visits “would have been part of a 60-day episode.”

Plus: PDGM drastically changes how LUPA thresholds work. Currently, the threshold is the same for all case mix groups at five visits. Under PDGM, the threshold will vary from two to six visits, depending on the HHRG, and will apply to half the time (30 instead of 60 days).

That means “there is a need to know, for case planning, the LUPA visit threshold” for each case, Ingber advises. It “will no longer be the same number of visits for every episode.”

Remember, “financially, in some cases, a LUPA can be the difference between a $2,600 payment for an episode of care and an adjusted payment of $300,” notes Laurie Salmons with McBee Associates on the consulting firm’s blog. (See box, p. 147, for per visit payment rates that apply to LUPA episodes.)

How it works: Under PDGM, “each of the 432 case-mix group has a threshold to determine if the period of care would receive a LUPA,” a Centers for Medicare & Medicaid Services official explained in CMS’s February webinar about PDGM. “This threshold is determined by the tenth percentile of visits in each payment group, with a minimum threshold of 2.”

Billing a LUPA “functions like a look-up table,” another CMS staffer elaborated in the webinar. “For each HIPPS code, there is a LUPA threshold. So, look up code A, threshold is 2, look up code B, the threshold is 3, look up code C, the threshold is 5,” he said. “It is a simple correspondence in those.”

PDGM will retain the LUPA add-on payment for a first episode, a CMS official said in the webinar. Remember, the add-on amount is adjusted for wage index, points out M. Aaron Little with BKD in Springfield, Missouri.

Impact: In assigning some episodes only a two-visit LUPA threshold, CMS expects to see behavioral changes. CMS assumes that “for one-third of LUPAs that are 1 to 2 visits away from the LUPA threshold, HHAs will provide 1 to 2 extra visits to receive a full 30-day payment,” the agency says in the rule.

That’s part of the behavioral assumption that went into the 6.42 percent cut CMS has floated for PDGM, even though the model is supposed to be budget-neutral.

Currently, PPS episodes “with 2, 3, or 4 visits are similar, with each comprising about 2.4 percent of total episodes,” CMS says in the rule. In contrast, “episodes with 5, 6, or 7 visits each represent about 4.6 percent of total episodes. We assume this same phenomenon will be observed in the PDGM, except that, to account for the different threshold structure, it will occur for periods that otherwise would be 1 or 2 visits away from becoming non-LUPA.”

Elsewhere in the rule, CMS notes that “the evidence supports a pattern of ‘practicing to the payment’. Specifically, there is ample evidence that there are notable behavior changes as they relate to payment thresholds.”

Worst case scenario: Under PDGM, “a 60-day episode under the current system with 14 visits would potentially become two 30-day LUPAs under the proposed PDGM,” one commenter on the HH PPS proposed rule warned.

But CMS has held firm to its varying LUPA threshold design. “We set the LUPA threshold at the 10th percentile value of visits or 2 visits, whichever is higher, for each payment group in order to target approximately the same percentage of LUPAs as under the current system,” the agency explains.

CMS does pledge to “analyze this methodology once the PDGM is implemented in CY 2020 to determine whether any changes to the LUPA thresholds are warranted.”

CMS says based on current data, it expects 7.1 percent of 30-day periods will be LUPAs under the PDGM. That compares to a current average of about 8 percent.

Industry veterans express skepticism that the number will be that low. “The way CMS set the LUPA thresholds is very sensible, basing it on the lowest 10 percent of utilization,” Little notes. “But from a practical vantage, it’s really hard to comprehend that having shorter periods and higher thresholds could possibly produce fewer LUPAs … and yet, the data from CMS supports this position.”

Time will tell on whether the LUPA prediction holds true.

Watch for: CMS also plans to reevaluate LUPA thresholds for each PDGM payment group year based on the most current utilization data available, it says in the rule.

What LUPA Shape Are You In Now?

Home health agencies should waste no time in preparing for the major LUPA change. Wise providers will take these steps:

1. Evaluate your current LUPAs. Choose a random sample of your current LUPA claims for internal review, Salmons recommends. Drill down to the root causes of the LUPA and what could have been done to avoid them, when possible.

Watch out: “Just like budget neutrality, just because the national aggregated average [for LUPAs] is 7 percent, that does not mean when you get to an individual agency level the conversion from PPS to PDGM results in only 7 percent LUPAs,” Little warns. “Agencies really need to understand their individual PDGM impact estimate.”

2. Take action. Based on your review findings, set up an action plan to reduce inappropriate LUPAs now, such as those caused on inadequate intake processes, missed visits, scheduling issues, etc., advised BKD’s Karen Vance and Laura Page-Greifinger of Quality in Real Time in a PDGM National Summit presentation.

3. Set up LUPA oversight. Make sure LUPA monitoring is part of your case management process under PDGM. Consider whether moving a trailing visit or two from the second 30-day episode into the first episode would improve patient outcomes and cut a LUPA episode, Vance and Page-Greifinger offered.

4. Work on cost-cutting. Reducing inappro­priate LUPAs is good, but HHAs always will have a certain percentage of LUPAs under PDGM. “Getting costs down will help reduce the financial burden of LUPAs,” Gina Mazza and Cindy Campbell of Fazzi Associates advised in a recent webinar, “PDGM: Keys to Clinical Best Practices.”