Home Health Articles and Information


Jul 14, 2020 7:00:00 AM / by Kristi Bajer, BSN, RN, COS-C

How the RAP/ NOA penalty works

CMS' move away from split billing and the RAP payment has been caused in part due to high amounts of fraud allowed by the split payment.  Basically, fraudulent agencies file large amounts of RAP's without actually giving any care and disappear with the money never filing a final claim.  It is truly a case of a small number of agencies causing trouble for the rest.  Once a period billing may be easier than our current "split" approach, but making sure cash flow is steady will be key to surviving the transition.

Another part of the payment change is the penalty attached.  CMS has added this penalty for two reasons. To make sure the consolidated billing edits are triggered in a timely manner to reduce claim rejections for other providers who are providing care for a beneficiary who is already under a home health episode AND to follow the Notice of Election (NOE) that hospice works under.  CMS states this has been effective and believes home health will be no different. 

How does the 5-day RAP/ NOA penalty work?

Starting in January 2021 there will be a penalty assessed for every day greater than day 5 after the "from date" for each 30- day payment period without a RAP filed for each claim.

In 2022, the same will be true for the Notice of Admission (NOA), mirroring hospices' NOE though it is only required at the start of care. 

Below is the formula for how the penalty will be assessed.


                                                             Day of RAP or NOA /30 x  HHRG payment= Penalty
                                                                                       Simple Example Below
30-day HHRG = $2000.00
               RAP or NOA submitted on day 6
       6 /30 X $2000.00= $400.00 (20%)
Original HHRG     $2000.00
Penalty (20%)       -  $400.00
Total payment      $1,600.00
Also, note if a RAP / NOA is submitted 25 days late (with a RAP / NOA submission 30 days after the start of care), there would be a 100 percent reduction to the payment.  
Here is a little more information regarding the penalty;
  •  It is deducted at the rate of 1/30th of the total 30-day payment period.
  • No LUPA payments are made that fall within the late period.
  • The payment reduction cannot exceed the total payment of the claim.
  • The non-covered days are a provider liability and the provider may not bill the beneficiary.

 CMS may waive the consequences of failure to submit a timely-filed RAP under the following circumstances;
  • CMS determines that there were "exceptional circumstances".
  • Exception to the consequences for filing the RAP / NOA late. 
            Examples include; fires, floods, earthquakes, or other events that may prohibit the home health            agency's ability to operate.
  • A CMS or Medical contractor systems issue beyond the agency's control.
  • A newly Medicare-certified agency that is notified of their certification after the date or is waiting for its user ID from its Medicare contractor.
  • Other situations as determined by CMS to be beyond the agency's control.

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Schedule a call today to learn how you can stop worrying about unpredictable margins and frustrated clinicians, and instead increase clinician productivity while achieving stable, predictable margins!


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Tags: Home Health, COVID-19, Telehealth, Home Health Care, Final Rule, 5-Day RAP Penalty

Kristi Bajer, BSN, RN, COS-C

Written by Kristi Bajer, BSN, RN, COS-C

Kristi Bajer BSN, RN, COS-C, brings over 10 years of real world experience as a clinician, director, and administrator in home health. She is a firm believer in diagnosis driven evidence-based care in home health. Currently, she assists agencies with external chart audits and Medicare appeals, as well as providing training and coaching on OperaCare implementation and building QAPI programs using data to drive success and protect agencies from government audits.