CMS Tightens Home Health Add-On Payments

The Centers for Medicare & Medicaid Services (CMS) is alerting home health providers that their billing departments should be aware of new requirements to improve the enforcement of existing policies for certain payments.

Change Request (CR) 9027 notifies home health agencies of new edits in Original Medicare systems to ensure Low Utilization Payment Adjustment (LUPA) payments under the Home Health Prospective Payment System (HH PPS) are made appropriately.

The HH PPS includes an additional payment when HH PPS episodes subject to LUPAs are the first episode in a sequence of adjacent episodes or are the only episode of care received by a beneficiary. This payment is often referred to as the “LUPA add-on.” 


Quirks of Medicare processing systems have been allowing inappropriate LUPA payments under some circumstances, such as when there are multiple claims being processed for a single beneficiary at the same time or out of sequence. CR9027 calls for Medicare systems to be updated to close these loopholes and prevent the inappropriate payments, according to the Medicare Learning Network memo on this issue released by CMS.

The “Medicare Claims Processing Manual” revisions that highlight the requirements of CR9027 are regarding adjustments of episode payment – LUPAs and request for anticipated payment (RAP) and HH PPS claims. 

“HHAs should take care to ensure that they submit accurate admission dates, especially if episodes are submitted out of sequence,” CMS advises in the notice. “Inaccurate admission dates may result in Medicare systems returning LUPA claims where an add-on payment applies, but the add-on was paid inappropriately on a later dated episode in the same sequence of adjacent episodes.”


Medicare systems may return LUPA claims to the provider if the claim meets the criteria for a LUPA add-on payment, but it contains no qualifying skilled service.

“In these cases, the HHA may add the skilled visit to the claim if it was omitted in error and re-submit the claim,” CMS says. 

Regarding RAP and HH PPS claims, the manual changes cover how a particular code line should be dated.

Read official instruction for CR9027 here.

Written by Cassandra Dowell