Home Health & Hospice Week

Waiting on physician documentation will exacerbate cash flow crunch.

If Medicare moves forward with its plans to eliminate Requests for Anticipated Payment, it will all but secure the hardship and possible closure of agencies lacking a cash flow safety net.

So say many commenters on the 2020 home health payment proposed rule that the Centers for Medicare & Medicaid Services issued in July.

Recap: The rule proposes to reduce RAP payments to 20 percent of the expected episode payment in 2020 (down from the current 60 percent for initial episodes and 50 percent for subsequent episodes), and to eliminate RAPs altogether in 2021 (see Eli’s HCW, Vol. XXVIII, No. 25-26). CMS already eliminated RAP payments in 2020 for newly enrolling agencies and implemented an “enhanced oversight” period of newly enrolling HHAs in 2019, under which they don’t receive RAP payments.

And remember: That’s 20 percent of a 30-day episode payment, compared to 60 or 50 percent of a 60-day episode payment now.

Reducing RAP payments to such a small amount, and then eliminating them altogether, will be a tremendous financial hardship, many home health agencies tell CMS in their comment letters. “The elimination of the RAP payment is a seismic shift for the home health industry,” stresses Elizabeth Buckley with Trinity Health At Home headquartered in Livonia, Michigan. “Having this RAP elimination occur at the same time as PDGM and the behavioral adjustment could be a death knell for agencies and create an access issue,” warns the health system-based chain in its comment letter.

CMS seems to be under the misappre­hension that the shorter 30-day billing period means home health agencies will receive payment not too long after that period closes. That is not the case, multiple providers tell Medicare officials in their letters.

Agencies are “limited in their ability to submit claims, as they are fully dependent on referring physicians or providers to complete signed orders for the care provided by home health,” points out Mary Myers with the Johns Hopkins Home Care Group in Maryland in a comment letter.

Physicians, “despite our best efforts, remain notoriously slow” with their paperwork, stresses the Home Care Alliance of Massachusetts in its comment letter.

Doc paperwork delays are largely “beyond the control of the agency,” laments Franklin County Home Health Agency in Vermont.

Medicare’s payment floor also can slow reimbursement, Myers highlights.

Don’t forget: The payment delays are exacerbated by most cases’ high up-front costs, Myers adds. “Agencies incur large amounts of costs initiating starts of care with patients,” which include a “detailed, extensive assessment — OASIS,” Myers adds.

Plus, “payment obligations to staff and third party contractors … won’t wait,” Franklin County HHA stresses in its letter.

HHAs without cash flow backup will see major disruption, and possibly even be forced to close their doors, commenters worry. And that will lead to access problems. “This seems very short-sighted for an industry that provides care using the fewest Medicare dollars and keeps patients out of the hospital,” maintains Melissa Morton-Jost in Illinois, in her comment letter.

The RAP change will disproportionately affect small, nonprofit, and rural providers, commenters maintain (see story, p. 287). The burden added by a new Notice of Admission requirement will make it even worse (see story, p. 289).

Consider A Phase-In

If CMS won’t get rid of its RAP elimination altogether, it should at least make the change more gradual, multiple commenters exhorted. “Instituting a longer transition period will help agencies continue to remain financially viable, particularly with implementation of the 30-day unit of payment,” notes physical therapist Kade Erickson in Utah in his comment letter.

“Any changes to the RAP payment should be made slow and steady,” Morton-Jost advises. That way, “those agencies with less access to investors and/or lines of credit have time to react to decreased cash flow,” Morton-Jost suggests.

Agencies need at least an additional 12 months to “adjust cash management,” says Pat West with Pioneer Home Health Care Inc. in Bishop, California.

Alternately, “CMS should perform pilot testing and demonstrations prior to making these significant changes,” urges Brad Hollinger, CEO of Vibra Healthcare and Ernest Health in Pennsylvania.

Timeline: RAP elimination is one of the proposed rule areas in which CMS has the most discretion. HHAs will see whether CMS heeds its comments when it publishes the final rule, likely in late October or early November.

Note: The proposed rule is at www.govinfo.gov/content/pkg/FR-2019-07-18/pdf/2019-14913.pdf.