Home Health & Hospice Week

LUPAs are sky high and coding remains mostly unchanged, claims show.

If you feel like you aren’t getting paid enough under the new Patient-Driven Groupings Model that took effect Jan. 1, claims data is backing that up.

A new study commissioned by the Partnership for Quality Home Healthcare shows that home health agencies are getting signifi­cantly underpaid under PDGM. “Using available data from January to April 2020 we estimate the system to be 6 to 22 percent below budget neutral payment levels,” says health economics consulting firm Dobson DaVanzo & Associates in a 17-page Aug. 24 report.

Reminder: The Centers for Medicare & Medicaid Services cut PDGM payment levels by more than 4 percent because it expected behavioral changes, including adding visits to exceed Low Utilization Payment Adjustment thresholds and upcoding to capture higher reimbursement categories under PDGM.

Analysis of 2020 Medicare home health claims “found that agencies may be underpaid … in 2020 due to the dual pressures of payment system reform and the ongoing COVID-19 public health emergency,” Dobson acknowledges in a release about the report. But even “prior to the pandemic-related state actions (in January and February), there were many more cases penalized for having too few visits within an episode than CMS targeted in its rulemaking,” the firm concludes. “This is likely the result of PDGM but was subsequently exacerbated by the PHE.”

In addition to much higher LUPA rates than predicted, coding has also mostly stuck to historic trends instead of being optimized for reimbursement, the firm found. CMS “assumed home health agencies would change their documentation and coding practices to assign the highest-paying diagnosis code as the principal code for the 30-day period of care, which has largely not occurred,” it says.

Case mix groups that “stand out for their departure in the behavioral assumption group from historical trend” are MMTA-Endocrine and Neuro groups, Dobson says.

PDGM’s 4.36 percent behavioral adjustment “is inherently a significant contributor to the observed payment shortfall,” Dobson says. But “even without this reduction, payments would still be at below budget neutral levels.”

Bottom line: “The behavioral assumptions for PDGM implementation have not held true,” the report concludes. “Overall payments and case volume are down with very high LUPA rates.”

PQHH blasts the proactive rate reduction under PDGM. “These behavioral adjustments, which are not supported by data, deprive providers of the very resources needed to furnish high quality care and act to limit the provision of home health care at a time when patients need it the most and the Medicare program should be encouraging its use,” the trade group says in its comment letter on the 2021 home health payment proposed rule.

In the proposed rule, CMS said it wouldn’t make a further productivity adjustment to 2021 rates because of the irregularity of data under the COVID-19 PHE (see HCW, Vol. XXIX, No. 25-26). But that includes not analyzing whether its 2020 productivity adjustment and resulting rate reduction were justified.

“The Partnership continues to be concerned that CMS has failed to provide any data or evidence to support these behavioral assumptions and has chosen not to consider the available data for CY 2020 which, as demonstrated above, raises significant concerns regarding the accuracy of the assumptions that CMS has made,” the group rails.

Note: The report is appended to the end of PQHH’s rule comments at http://pqhh.org/wp-content/uploads/2020/08/FINAL-submitted-Aug24-PQHH-CY2021-Home-Health-Proposed-Rule-Comments1.pdf.