Under the prospective payment system (PPS), Medicare pays home health agencies (HHAs) for each 60 day episode of care that beneficiary receives, called a payment episode. During our audit period, if an HHA provided four or fewer visits in a payment episode, Medicare paid the HHA a standardized per-visit payment. Claims for these types of payments are called Low Utilization Payment Adjustment (LUPA) claims. Once a fifth visit was provided during the payment episode (i.e., above the LUPA threshold), Medicare paid an amount for the services provided that was, in general, substantially higher than the per-visit payment amount. Because of the large payment increase starting with the fifth visit, HHAs have an incentive to improperly bill claims with visits slightly above the LUPA threshold.
Our objective was to determine whether payments for home health services with five to seven visits in a payment episode complied with Medicare requirements.
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Source: CMS Could Have Saved $192 Million by Targeting Home Health Claims for Review With Visits Slightly Above the Threshold That Triggers a Higher Medicare Payment / U.S. Department of Health and Human Services Office of Inspector General