Home Health & Hospice Week

What HHAs got: “At this time we do not have sufficient CY 2020 data in which to make any changes to the LUPA thresholds for CY 2021,” CMS says in the final rule published in the Nov. 4 Federal Register. “We set the LUPA thresholds and the case-mix weights for CY 2021 equal to the CY 2020 LUPA thresholds and case-mix weights established for the first year of the Patient-Driven Groupings Model (PDGM).”

CMS didn’t address in the rule the National Association for Home Care & Hospice’s request to at least do a mid-year review of LUPA thresholds in 2021, when full year 2020 data would be available. The agency told NAHC earlier this year it was “premature” to adjust LUPAs “even though there were strong signs pointing to a significant increase in LUPAs,” NAHC says in its member newsletter.

Another reimbursement topic a number of commenters raised was outliers. “Agencies would be better served if this 5 percent [withheld for outlier payments] were reinstated into regular reimbursements, allowing owners and operators to account for reserves at their discretion,” commenter Anne- Marie Fontenot told CMS in her letter. That’s particularly true because CMS targets 2.5 percent for outlier payments, and the other 2.5 percent is basically lost to providers.

What HHAs wanted: “A few commenters recommended to end the outlier provision entirely and reinstate the 5 percent withheld into regular reimbursements,” CMS acknowledges in the final rule.

What HHAs got: “Outlier payments are beneficial in that they help mitigate the incentive for HHAs to avoid patients that may have episodes of care that result in unusual variations in the type or amount of medically necessary care. The outlier system is meant to help address extra costs associated with extra, and potentially unpredictable, medically necessary care,” CMS maintains in the final rule. “We are finalizing the fixed-dollar loss ratio of 0.56 for CY 2021 to ensure that total outlier payments not exceed 2.5 percent of the total payments estimated to be made under the HH PPS.”

Finally, the rural add-on phaseout is adversely affecting agencies struggling under PDGM and COVID-19. “The rural add-on was created and implemented to help make it financially feasible for home health agencies to continue to provide services to Medicare beneficiaries that lived in rural areas,” accountant John Reisinger with Innovative Financial Solutions for Home Health in Tampa, Florida said in his comment letter. “That is just as pertinent today as it was some 20-plus years ago when implemented.”

Reminder: In 2021, HHAs in “high utilization” rural counties will receive no add-on; HHAs in “low population density” rural counties will see a 2 percent add-on; and HHAs in all other rural counties will see a 1 percent add-on. In 2022, only agencies in low population density counties will see an add-on, and it will be reduced to 1 percent. In 2023, all rural add-ons will go away.

“With the sunset of the rural add-on payment, smaller agencies may eliminate therapy services to account for the loss of revenue, while other agencies may not be able to stay afloat with the reduction in payment,” cautioned attorney consultant Candace Bartlett on behalf of Frisco, Texas-based Aegis Therapies in the therapy vendor’s comment letter.

What HHAs wanted: CMS should “maintain the 3 percent rural add-on and … potentially look to increase that percentage as the decreased density in rural areas creates increased financial burden for the agency,” Aegis urged.

“We recognize that CMS is statutorily required to continue the phase out of the rural safeguard and cannot make any administrative changes to the scheduled phase out,” acknowledged LHC in its comment letter. But “we request that CMS join with the home health community in asking Congress to modify and reauthorize the three percent (3%) rural safeguard for all rural counties to ensure access to home health services by Medicare beneficiaries residing in rural areas.”

CMS can also make up for rural shortfalls by changing its wage index and telehealth possibilities, commenters suggested.

What HHAs got: “Because the current rural add-on policy is statutory, we have no regulatory discretion to modify or extend it,” CMS confirms. But it “will continue to monitor patient access to home health services and the costs associated with providing home health care in rural versus urban areas.”

The agency also punted on any telehealth or wage index changes to help make up for the rural budget crisis. (See more on those topics in a future issue of HCW by AAPC.)

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