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CMS Proposes Elimination of RAPs and Implementation of PDGM for CY 2020

IMPORTANT NEWS FOR HOME HEALTH AGENCIES – In a fact sheet released July 11, 2019, the Centers for Medicare & Medicaid Services (CMS) detailed its annual update to the Medicare rate, as well as its plan for the implementation of the Patient-Driven Groupings Model (PDGM) and other proposals for calendar year (CY) 2020, which can be downloaded here. Despite the pushback in recent months from lawmakers, home health stakeholders, and organizations such as the National Association for Home Care & Hospice, CMS indicates their intentions of moving forward with many of the provisions included in PDGM.

Perhaps chief among Thursday’s proposed rule is CMS’s plan to phase out pre-payments for home health agencies (HHAs). This would eliminate the ability of HHAs to submit a Request for Anticipated Payment (RAP) in order to obtain 50-60% of the anticipated payment at the beginning of a patient’s care episode. According to CMS, the plan for the elimination of RAPs was brought on by “a marked increase in RAP fraud schemes perpetrated by existing home health agencies that receive significant upfront payments, never submit final claims and then close for business.” CMS is proposing that RAP payments for existing providers will be phased out over the next year, with full elimination occurring by 2021.

However, CMS’s proposed rule also includes a 1.3% – or $250 million – projected increase to the Medicare payments made to HHAs. This rate increase reflects a 1.5% home health payment update as well as a 0.2% decrease due to reductions made by the new rural add-on policy.

Currently, HHAs receive a bundled payment for all services provided in a 60-day episode of care. Under the 2020 proposed rule, the episode of care will decrease to 30 days, as required by the Bipartisan Budget Act of 2018. Additionally, it required CMS to discontinue using the number of therapy visits in an episode to determine payments for HHAs. HHAs previously had the ability to gain additional reimbursement by over-visiting patients, a flaw CMS was eager to correct.

“We are also proposing updates to payments for home health agencies under the new Patient-Driven Groupings Model, which focuses on patient characteristics to more accurately pay for home health services, rewarding value over volume,” said CMS Administrator Seema Verma.

The CY 2020 proposed rule would go into full effect on January 1, 2020. Nevertheless, many organizations have indicated they will be continuing efforts to urge CMS to reevaluate the proposed rule.

For more information regarding the CMS proposed rule for CY 2020, please contact Jessica L. Gustafson, Esq. or Abby Pendleton, Esq.

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