Home Health Articles and Information


Aug 4, 2020 6:00:00 AM / by John Reisinger, CPA

It is Time to Send CMS Your Comments on the 2021 Proposed Rule

Proposed changes in the 2021 Home Health PDGM payment rule impact your livelihood, so it is worthwhile to get involved and submit comments before the August 31 deadline. You may pick and choose which topics to comment on and you can do so anonymously if you prefer. There are more topics worthy of comment in some years than in others; this year I see three with a strong potential impact on an HHA's success. 

  1. Telehealth/Remote Patient Monitoring (everyone comment)
  2. The Outlier Provision (everyone again)
  3. Home Health Wage Indices (HHAs affected by the following should comment)
    • 34 Urban counties are proposed to be changed to Rural status
    • 47 Rural counties would change to Urban
    • 31 Urban counties would change name or CBSA number (Core-Based Statistical Area)
    • 19 Counties would change to a different CBSA

Each of these will change the wage-index for all services in these areas, and many will be negative changes, including reduced reimbursement rates. In fact, some of these reductions would be so significant that CMS is proposing a 5 percent cap on the amount an area's wage index can be reduced in CY 2021. Not so for future years, so far, as no cap is proposed yet for CY2022.

Additional comment topic

Another potential area to comment on would be "The Use of Technology under the Medicare Home Health Benefit." This is all about Telehealth, or Remote Patient Monitoring.  Although CMS is proposing to consider these costs as allowable administrative costs rather than as non-allowable costs, as they have always been, they are still refusing to treat them as allowable chargeable visits. Even if they will not add payment for the use of telehealth technologies, it would help significantly if they were considered chargeable visits that would count against the LUPA Threshold. 

An approach I believe everyone in the industry could get behind, and submit in their own words, might be something like:

"I request that CMS put home health providers on par with other Medicare providers, e.g. hospitals, doctors, outpatient PT entities, etc., by allowing home health providers to:

  • treat Telehealth/Remote Patient Monitoring visits as allowable chargeable visits as part of the Medicare Home Health Benefit (the BIG wish)
  • attribute the costs of providing Telehealth/Remote Patient Monitoring to the disciplines involved, and not be treated as an administrative cost (the fallback position)"

Why Submit Comments? What is Being Proposed?

The Proposed Rule was published in the Federal Register on Tuesday, June 30, 2020. The majority of important changes are in § III, though § IV proposes some changes to the Conditions of Participation that mostly affect clinical operations, and § V deals with Home Infusion Therapy, again mostly clinical operations-oriented. As a CPA and financial adviser, not a clinical consultant, I will focus my analysis on § III.

Overall, this year's proposal is relatively passive, considering the blows that we as an industry have been taking for the last 15+ years. There is no "Nominal Change in the Case-Mix Weight Adjustment" proposed for Year 2 of PDGM. This in itself is surprising as the average Case-Mix Weight identified so far for CY2020 appears to be much higher than what CMS had originally envisioned. This has been the cause of painful cuts in the past. Although it is not proposed for 2021, we must always be alert for it going forward.

LUPA Thresholds, Add-Ons and Case-Mix Weights

CMS is proposing no changes in CY 2021 for the LUPA Thresholds, the 453 Case-Mix Weights, or the LUPA Add-on Factors. CMS identified that they did not feel that they had an adequate amount of data to consider changes to any of these areas for YR 2 of PDGM.

Proposed Changes to the Home Health Wage Index

As mentioned above, there are some significant home health wage index changes proposed. All of them will trigger a change in the wage-index for all services provided in these geographic areas, and many of those changes will result in lower payments, which explains the proposed 5 percent limit on the amount an areas wage index could be reduced in CY 2021. While some regions will benefit from an increase in their wage index, others will be hit fairly hard. County-specific wage indices could hurt even more in CY2022 if the 5 percent loss cap is not carried forward to CY2022. 

Market Basket Looks Good...for Some

For providers submitting the required quality data, the proposed (net) Market Basket Update for CY 2021 is a 2.7 percent increase. Agencies not submitting the required quality data will see their Market Basket Update reduced by 2 percentage points, leaving a net increase of only 0.7 percent. Taking into consideration the CY2021 National, Standardized, 30-day Payment Rate and the LUPA Rates, these amounts will increase by approximately 2 percent for CY2021.

CAVEAT: Agency owners/operators need to understand that the CY2021 2.7 percent increase is for all Home Health spending, not for any specific home health agency. If you count on hitting the average in your agency, you are rolling the dice with your future Medicare revenues. That level of increase is not guaranteed for any individual agency, it is an industry average. The only way to identify what your increase (or decrease) will be is to analyze it yourself, or outsource it to someone who knows how to do it. I have seen agencies saddled with double-digit reductions to their reimbursement rates when the industry overall was receiving an increase.

The Rural Add-on

The Rural Add-on is going to continue in accordance with what was identified in last year’s (CY 2020) FINAL HH PPS Rule. 

Changes to the RAP Process

Another set of changes proposed for CY2021 were originally found in the Final HH PPS Rule for CY2020. They will bring major changes to your Request for Anticipated Payment (RAP):

  • The RAP payment will be eliminated starting with all 30-day payment periods that begin on or after January 1, 2021.
  • HHAs will continue submitting through the calendar year what will be euphemistically called a "No-Pay RAP," or, as some have joked, a Request for Anticipated No Payment.

  • Beginning on January 1, 2022, you will continue to submit start-of-care data but the name will be corrected to "Notice of Admission."

CAUTION: No-Pay RAP Could Become Negative-Pay RAP

  • A financial penalty will be assessed against all 30-day payment periods (starting on/after January 1, 2021) if the No-Pay RAP is submitted late
  • The No-Pay RAP (NOA in 2022) must be submitted no later than the 5th day of services (defined as SOC date + 4).
  • The penalty will be calculated using the day of the 30-day period the No-Pay RAP is submitted as the numerator and 30, the number of days in the payment period, as the denominator.
             For example: For a RAP submitted on Day 6, the penalty is 6/30 of the 30-day period payment, or 20 percent, deducted from your final payment. Likewise, day 7 would produce a reduction of 23.33 percent (7/30) of the total payment. Day 15 = 50 percent, and so on. Therefore, if you submit your RAP on or after Day 30, the penalty is 100 percent, no payment at all. 
  • Your only solace is in the lessened documentation requirements for the No-Pay Rap, explained in the Final Rule for CY2020 (excerpt below) as being adjusted because there is no reimbursement associated with the No-Pay RAP.

"We are finalizing a policy that submission of "no-pay"RAPs" can be made when the following criteria have been met:

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 §§484.60(b) and

2 - The initial visit within the 60-day certification period must have been made and the individual admitted to home health care."

CMS concluded this section by saying, "We are also finalizing a provision which will allow the advance submission of certain No-Pay RAPs in CY2021 such that in instances where the plan of care dictates that multiple 30-day periods of care will be required to effectively treat the beneficiary, we will allow the HHA to submit both the RAP for the first 30-day period of care and the RAP for the second 30-day period of care (for a 60-day certification) at the same time to help further reduce provider administrative burden." However, this could be seen as two-sides of the same coin:

  • On one side, it should help the timeliness of the no-Pay RAP submission, but...

  • On the other side: What about those instances in which a change in condition requires a change in the patient's treatment plan for the second 30-day period? Will this be a simple cancellation of the original no-Pay Rap for this 30-day period and the submission of the revised no-Pay RAP, or might this become a problematic process for the industry? Only time will tell. Consider adding this question to your comments when you submit them.

The Outlier Provision

Another area not proposed to see any significant changes for CY 2021 is the Outlier Provision. However, it is this provision that I see as problematic to the home health industry in general.  Simply put, if the Outlier Provision were eliminated, every agency would realize an increase of 2.5% in their reimbursement rate for every 30-day payment period, but would not receive an Outlier payment on any 30-day payment period. Most people worry about losing the Outlier payment, not realizing that they would likely realize more in home health reimbursement over the year by obtaining an increase of 2.5% on all 30-day payment periods!  

This is mostly because the National, Standardized, 30-Day Payment Rate is reduced by 5% to fund the Outlier Provision. However, there is a cap of 2.5% for Outlier spending, creating a 2.5% discrepancy. This 2.5% discrepancy is monies allocated to Home Health every year that just vanish every year, providing no benefit to home health providers or beneficiaries. 

This 2.5% discrepancy amounts to approximately $450 million per year, and this discrepancy has existed since CY2011! Therefore, it is my opinion that the Outlier Provision is an area that everyone should review to see whether they have historically been positively or negatively impacted by this situation. 

If your agency lost net reimbursement because of it (which I believe is the case for over 95 percent of HHAs), I strongly recommend that you use your right to participate in the Rule-Making Process and submit a comment requesting that the Outlier Provision be eliminated from HH PPS and the 5% withheld to fund the Outlier Provision be restored to the National, Standardized, 30-Day Payment Rate. 

Telehealth/Remote Patient Monitoring

The last area I examined was the proposed rule for Telehealth, or Remote Patient Monitoring. There is a common misconception across the industry that our ability to use Telehealth is new; and that is plain wrong! The organization I was with 20 years ago was utilizing Telehealth to some degree of success, both clinically and financially. What is changing is that CMS is now proposing to allow the costs associated with Telehealth/Remote Patient monitoring to be considered as an allowable administrative cost on the cost report. It will move from a non-allowable cost center (like marketing expenses) to an allowable cost center (e.g. entered on line 5 of the current cost report), but this change was already planned before additional, temporary provisions were made for the coronavirus pandemic. 

Being able to treat Telehealth expenses as allowable costs is a positive step. However, it is still a far cry from what many other segments of Medicare are entitled to. Hospitals, doctors, outpatient PT facilities, etc., are able to treat Telehealth as an allowable and reimbursable patient encounter. We in home health cannot. And there is a further restriction in the Proposed Rule:

"The Plan of Care must include any provision of remote patient monitoring or other services furnished via a telecommunications system and must describe how the use of such technology is tied to the patient-specific needs as identified in the comprehensive assessment and will help to achieve the goals outlined on the POC."

This seems reasonable, to an extent. However, as we learned with the Face-to-Face requirement, MAC and RAC subjectivity could come into play here. How much documentation is considered reasonable? What is considered inadequate?

(See "ATA Urges Congress to Protect Telehealth Post-COVID". –Ed.)

Final appeal

In spite of the restrictions on the overall allowability of Telehealth, I remain convinced that this is a positive first step for the home health industry. To get to the next step, we must ramp up industry participation in the Rule-Making Process, on this issue and all the others I have been discussing. We must get thousands and thousands of industry stakeholders and interested parties to submit a comment on Telehealth/Remote Patient monitoring, not the mere hundreds of past years. They should request that CMS put the home health industry on par with other Medicare provider segments and allow us at least to:

  • Attribute the costs of providing Telehealth/Remote Patient monitoring to the disciplines involved, not just be considered an allowable administrative cost

  • Be able to treat the Telehealth/Remote Patient monitoring visits as allowable, chargeable visits as part of the Medicare Home Health Benefit

Following is a copy of the bookmarked Home Health PPS Proposed Rule for CY2021:




The Rule Making Process

When CMS publishes a rule in the Federal Register, stakeholders and interested parties generally have 60 days to review and comment. Unfortunately, participation by home health stakeholders and interested parties has traditionally been disappointingly scant. For example, when Rebasing, the most significant change since the inception of PPS at that time, was proposed in 2014, there were only 100 comments submitted from well over 12,000 HHAs, not to mention associations, vendors, consultants, attorneys, and others who call home health their primary professional focus. Commenting on significant proposed changes is one of the most beneficial advocacy activities one can do, for the entire industry and for one's self. 

If your National/State Association, your Software Vendors, Consultants, Attorneys, Leadership Team, etc. submit comments to proposed rules, be sure to thank them!  If not, you might ask them why not, especially if their living depends on the health of our industry like yours does. 

To make a meaningful impact on this or any proposed rule, remember these principles:

  1. Submit high-quality, polite, thoughtful comments.
  2. Avoid cutting-and-pasting the words of others, as has been recommended too often, even if doing so seems easy.

  3. Volume matters. Work to increase the total number of comments by urging colleagues to submit their own. 

The easiest way to submit comments is via the electronic portal identified in the Federal Register. Click here, then click on the "COMMENT NOW" button. Either compose online or write and save a word document and drag and drop it onto that page.

DEADLINE, 5:00 pm EDT, August 31, 2020

Reach out to John at  JReisinger@IFSforhomehealth.com

©2020 by Rowan Consulting Associates, Inc., Colorado Springs, CO. This article originally appeared in Home Care Technology: The Rowan Report. Click here to subscribe. It may be freely reproduced provided this copyright statement remains intact. editor@homecaretechreport.com


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

John Reisinger, CPA

Written by John Reisinger, CPA

John Reisinger, CPA, is the founder and Principal of Innovative Financial Solutions for Home Health, a financial consulting firm based in Tampa, Florida. He has developed his expertise in Medicare payment systems during 30 years with home health providers and as a financial advisor to numerous agencies and is the industry leader working to bring back the sound financial and operational fundamentals long missing from our industry.