CMS to Phase Out Split-Percentage Payments for New HHAs

Despite concerns from home health agencies (HHAs) that their cash flow could be significantly impacted, the Centers for Medicare & Medicaid (CMS) has announced that beginning in calendar year 2020 HHAs that are certified for participation in Medicare on or after January 1, 2019, will no longer receive split-percentage payments.

Split-percentage payments allow a home health agency to receive a percentage of the anticipated payment at the beginning of a patient’s care episode. The payment is determined based on the codes generated by the Home Health Agencies Outcome and Assessment Information Set (OASIS). The HHA then receives the rest of the payment at the close of the 60-day episode, unless there is an applicable adjustment to the amount.

Existing HHAs, (i.e., those certified for participation in Medicare prior to January 1, 2019), will continue to receive Request for Anticipated Payment (RAP) payments upon implementation of the Patient-Driven Groupings Mode (PDGM) in calendar year 2020.

HHAs that are certified to participate in Medicare effective on or after January 1, 2019, would still be required to submit a “no pay” RAP at the beginning of care to establish the home health period of care, as well as, every 30 days thereafter upon implementation of the PDGM in calendar year 2020.

For split percentage payments to be made, existing HHAs would have to submit a RAP at the beginning of each 30-day period of care. For the first 30-day period of care, the split percentage payment would be 60/40 and all subsequent 30-day periods of care would be a split percentage payment of 50/50. A final claim must be submitted at the end of each 30-day period of care.

In its final rule, published in the Federal Register, CMS noted it had “solicited comments as to whether the split payment approach would still be needed for HHAs to maintain adequate cash flow if the unit of payment changes from 60-day episodes to 30-day periods of care under our proposal.” In addition, CMS solicited comments on ways to phaseout the split percentage payment approach in the future.

The responses drew a wide range of responses:

Some indicated that the elimination of the split percentage would align better with a 30-day payment and would simplify claims submission. Others stated they did not want any type of phase-out of RAPs and that RAPs should continue under the PDGM to ensure no disruption in cash flow. There was some support to phase out the split-percentage payment over a multiyear period starting at least one year after the implementation of the PDGM, so as  to allow agencies to adapt to PDGM. Some indicated that RAPs for late periods could be phased out, but that RAPs for early periods should remain in place to ensure an upfront payment for newly admitted home health patients. Finally, some supported the reduction in the split percentage payment, but wanted to allow RAPs for newly enrolled HHAs.

CMS noted that as a result of a reduced timeframe for the unit of payment from a 60-day episode to a 30- day period, it believed that a split percentage approach to payment may not be needed for HHAs to maintain an adequate cash flow.

CMS also said it believed that by eventually phasing out the submission of RAPs with each 30-day period, it would significantly streamline claims processing for HHAs and that by eliminating RAP payments for newly-enrolled HHAs, HHAs would be able to structure their operations without becoming dependent on a partial advanced payment and take advantage of receiving full payments every 30 days.

Still, CMS noted it would continue to monitor the need for RAPs after the implementation of the PDGM.

“We understand that HHAs may need time to adapt to the PDGM, so any phase-out of RAP payments for existing HHAs would be addressed in future rulemaking,” CMS stated in its rule.

The Health Law Offices of Anthony C. Vitale can assist clients with understanding these new rules. Give us a call at 305-358-4500 or send an email to info@vitalehealthlaw.com and let’s discuss how we might be able to assist you.

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