Operating an efficient and profitable home health organization can be challenging even in the best of times.

By most industry accounts, 2020 was anything but the best of times. And as the coronavirus (COVID-19) pandemic continues to evolve, 2021 could be just as challenging – perhaps even more so – for home health providers throughout the country.

Where do challenges reside in the home health landscape? Seemingly everywhere—from billing and compliance considerations, to optimizing revenue cycle management, managing transitions of care, ensuring adequate staffing and more.

In this blog, we address this by offering best-practice strategies for ensuring optimal billing practices under the new Patient-Driven Groupings Model, or PDGM.

In January 2020, PDGM became effective. PDGM is the most significant change in home health billing and operations since the implementation of the current Prospective Payment System (PPS) began in 1999. It migrates home health reimbursement from one that is therapy-based to one driven by a patient’s clinical characteristics. It’s widely acknowledged that PDGM is intended to help agencies deliver higher quality of care. Additionally, financial preference is given to referrals coming from hospitals and SNFs, rather than community sources such as primary care physicians.

Essentially, PDGM is a revamped version of the Home Health Groupings Model, or HHGM. As an alternative case mix adjustment methodology, it cuts payment periods in half for home health agencies – to 60-day episodes with two 30-day pay periods – and removes therapy volume from consideration when determining home health reimbursements.

PDGM is the latest step in converting home health reimbursement to a value-based payment system. Nowhere is this more apparent than in the shift to 60-day episodes with two 30-day pay periods. This reduced window is a seismic development in home health, for your agency must now plan, deliver, document and bill for care twice as often.

Understanding PDGM’s Impact on Therapy Volume

With the elimination of therapy volume as a driver of reimbursement, it might seem logical to slash the volume of patient therapy services your agency provides. Yet, PDGM binds therapy payments to patient needs and clinical characteristics, so in this regard, therapy still merits reimbursement when a patient’s plan of care or other relevant circumstances call for it.

Review Choice Demonstration (RCD) and Relevance for Home Health in 2021

RCD is intended to help ensure that accurate payments for home health services are made at the correct time through either pre-payment or post-payment review. Additionally, it helps protect Medicare funding from improper payments, reduces the number of Medicare appeals and improves provider compliance with Medicare program requirements.

In August 2020, the Centers for Medicare and Medicaid Services (CMS) announced it would not require a full-blown resumption of RCD in participating states. Rather, it would phase in RCD for agencies in North Carolina and Florida. Additionally, home health agencies in Illinois, Ohio and Texas will be granted flexibilities.

The bottom line: Claims submitted on or after March 29, 2020 are not required to go through the RCD process. Agencies that selected pre-claim review have the option to continue with pre-claim review—and claims will not be subject to a 25% reduction in payments. For agencies impacted by RCD, it’s necessary to continue submitting affirmation requests unless extenuating circumstances prevent the claim from being submitted timely. A Unique Tracking Number (UTN) should be added to each claim prior to billing, and claims submitted without a UTN should be carefully tracked to make sure valid documentation is available for future Additional Development Requests (ADRs).

RELATED E-BOOK: “5 Strategies to Position Your Home Health Agency for Growth in 2021 and Beyond.”

Request for Anticipated Payment (RAP) Changes – What They Mean for Home Health Agencies

In January 2020, CMS reduced RAP payments to 20%, which represents a 30-40% reduction. Additionally, home health agencies certified on or after Jan. 1, 2019 must submit RAPs every 30 days—yet they will receive no RAP payment. Agencies certified before Jan. 1, 2019 can continue to submit RAPs and will receive a split percentage payment.

CMS announced an important update that signifies major changes ahead for home health agencies. Specifically, in 2021, RAPs will serve as a notice of admission (NOA), used to establish the beneficiary’s home health agency on the common working file (CWF). In addition, agencies will be penalized if RAPs are not submitted within the timely filing limits.

The information below, summarized from the Medicare Learning Network 11855, explains this in detail:

The RAP serves a greater operational role for the Medicare program by establishing the beneficiary’s primary HHA in the CWF, so that the claims processing system can reject claims from providers or suppliers, other than the primary HHA, for the services and items subject to consolidated billing.

Starting in calendar year (CY) 2021, the split-percentage payment will be lowered to 0 percent for all HHAs (newly enrolled and existing).

Therefore, submit a RAP when:

1. The appropriate physician’s written or verbal order that sets out the services required for the initial visit has been received and documented as required at 42 Code of Federal Regulations (CFR) Sections 484.60(b) and 409.43(d)
2. The initial visit within the 60-day certification period has been made and the individual is admitted to HH care (84 FR 60548)

Also for CY 2021, there will be a non-timely submission payment reduction when the HHA does not submit the RAP within five calendar days from the start of care date (“admission date” and “from date” on the claim will match the start of care date) for the first 30-day period of care in a 60-day certification period and within five calendar days of the “from date” for the second 30-day period of care in the 60-day certification period.

This reduction in payment will be equal to a 1/30th reduction to the wage and case-mix adjusted 30-day period payment amount for each day from the HH start of care date/admission date, or “from date” for subsequent 30- day periods, until the date the HHA submits the RAP. The 1/30th reduction would be to the 30-day period payment amount, including any outlier payment, that the HHA otherwise would have received absent any reduction.

For LUPA 30-day periods of care in which an HHA fails to submit a timely RAP, no LUPA per-visit payments will be made for visits that occurred on days that fall within the period of care prior to the submission of the RAP.

The payment reduction cannot exceed the total payment of the claim. The payment reduction for the late submission of a RAP can be waived for exceptional circumstances as outlined in regulations at 42 CFR 484.205(i)(3).

Best Practices Around PDGM and RCD for Home Health Agencies:

• Make sure you fulfill the required number of visits needed to complete a 30-day period of care, and meticulously manage those visits, in order to get full reimbursement. Anything less can result in lower reimbursement via a Low-Utilization Payment Adjustment (LUPA) rate. Under LUPA rules, your agency is paid per visits, rather than an entire episode—which typically is three-to-four times that amount. A LUPA can occur when one less visit is made than the predetermined threshold. Moreover, the LUPA threshold can vary from one 30-day payment period to the next.
• Bring on patients/clients who will support a full 60-day episode. It is crucial that you ensure the patients your agency accepts meet the homebound and diagnosis requirements so they will not be inappropriately skilled.
• Assign a team member on your staff to track and monitor pre-claim requests to ensure they are being submitted timely, and that you’re receiving timely information back from the Medicare Administrative Contractor (MAC). This applies to both favorable and unfavorable requests (aka, affirmation or nonaffirmation). Either way, record the results in your EMR system so that when you are ready to release the claim, complete and accurate information is easily accessible.
• Document everything. In 2021, documentation from discharge providers will be critical in determining the correct clinical grouping and comorbidity level.
• Overall, maintain good stewardship of visit utilization—this means following the patient’s plan of care created for the specific 30-day period; managing resources according to patient needs; and making sure any missed visits are identified and rescheduled timely.