The healthcare industry has experienced more changes over the past few years than anyone, including home health agencies, could have anticipated. Even before COVID-19 necessitated new and costly safety measures, home health agencies were adjusting to the Patient-Driven Groupings Model (PDGM) and revisions to requests for anticipated payment (RAPs), and there are more changes to look forward to in 2022.
How Have RAPs Changed?
Prior to PDGM, you could submit a RAP at the beginning of a 60-day episode of care for a Medicare patient and receive 50%-60% at the start of the episode and the remaining balance when the final claim is submitted.
Fast forward to 2021, to RAPs that must be submitted for every 30-day episode of care and to the elimination of prepayments associated with a RAP submission. This effectively fulfilled the goal of the Centers for Medicare & Medicaid Services (CMS) to follow in the healthcare industry’s footsteps and begin a system of payment for services rendered rather than up-front payment. Furthermore, these no-pay RAPs are required to be submitted within five calendar days from the first day of care, with a 1/30th reduction in payment to the 30-day period for each day late from the start of care.
What is an NOA?
On January 1, 2022, CMS will make another major change to the way home health agencies submit bills for services provided to Medicare patients. RAPs will be completely phased out and replaced by notices of admission (NOAs).
An NOA is similar to a RAP in the sense that they both establish the start of a patient’s episode of care. The way in which they differ, however, will provide some relief to the current administrative process as well as a reduction in paperwork. Agencies are currently required to submit a RAP for each 30-day episode of care until the patient is discharged. In 2022, you will only be required to submit one NOA to your Medicare Administrative Contractor (MAC) at the time of admission that will cover contiguous 30-day episodes of care until the patient is discharged. A subsequent NOA is only required if a patient is readmitted to home care after having been discharged, regardless of the amount of time since discharge.
While the new NOA process will be a requirement for Medicare Part A and Part B patients, it will be optional for Medicare managed care plans. It’s important for agencies to contact their managed care plan provider to find out whether the new submission rules will be required.
Currently, home health agencies submit a RAP for every 30-day episode of care using type of bill (TOB) 322. This is followed by the submission of a claim using TOB 329, which is processed as an adjustment to the TOB 322.
Starting January 1, 2022, you will submit an NOA within five calendar days of the start of care using TOB 32A. Since the RAP is no longer required, you will only need to submit a TOB 329 claim for each 30-day episode of care until the end of the episode.
There are several additional requirements for submitting an NOA, including:
You must have a written or verbal order from a physician that contains the services required for the initial visit.
You must have conducted an initial visit at the start of care, which is completed by a clinician (nurse or therapist).
You must submit an NOA within five calendar days from the start of care date.
This last point is critical as non-timely NOA submissions will result in a reduction in payment. Payments will be reduced by 1/30 of the wage rate for each day from the start-of-care date until the date you submit the NOA.
In the event you do not submit an NOA by the filing deadline, you may request an exception, which, if approved, will waive the reduction in payment. The four circumstances that may qualify for an exception are weather or fire conditions that cause extensive damage, a CMS or a MAC issue with data, a new agency that is pending a provider number or other circumstance as determined by CMS or your MAC.
How Should Home Health Agencies Prepare for NOAs?
The reduction in payment for non-timely NOAs can be costly. To ensure that you consistently meet the five-day submission requirement and avoid steep penalties, it is important to be prepared for this new process.
There are a number of ways in which you can prepare for the 2022 change, including:
Print a roster of your current patients before the end of the year. An important aspect of the new process involves current patients. For each patient who is receiving home health services in 2021 that will continue in 2022, you will need to submit a one-time NOA listing an artificial admission date with the period of care beginning January 1, 2022. Furthermore, it’s a good idea to verify payers and recheck benefits for all current patients.
Talk to your software company. If your agency currently uses Medicare Electronic Data Interchange (EDI), make sure that your software company is ready; that they will be able to update the bill type from RAP to NOA, and that there will be a mechanism to create and submit NOAs within five days of the start of care. Some software may have the changes already built in.
Educate your billing staff. The employees who are currently responsible for submitting RAPs to your MAC should be prepared well in advance of the change. CMS has revised the Medicare Claims Processing Manual with details surrounding the new process and communicated official instruction to your MAC.
How Can Richter Help?
The best way to prepare for the upcoming CMS revisions is to review your processes to identify gaps and potentially vulnerable areas. Richter can help your agency perform a complete process review, and we can answer any questions you may have about RAPs, NOAs, PDGM or other home health and hospice challenges. Call Richter’s home health consultants at 866-806-0799 or request a free consultation.