CMS Finding New Ways to Penalize Home Health Providers

The Centers for Medicare & Medicaid Services (CMS) is finding new ways to penalize home health providers.

In its proposed payment rule for 2020 released last week, CMS floated the idea of phasing out pre-payments for home health services starting in 2020, killing them completely by the following year. Currently, home health providers can receive roughly 60% of anticipated payment at the beginning of a patient’s episode of care through a Request for Anticipated Payment (RAP). 

In place of RAPs, federal health care policymakers are proposing a new notice of admission requirement for home health agencies that comes with built-in penalties.


CMS already has similar mechanisms in place for other parts of the post-acute care continuum, including in the hospice industry, where providers are required to file a notice of election statement.

“The thing I’m really upset about is this notice of admission process,” Melinda Gaboury, co-founder and CEO of Healthcare Provider Solutions Inc., said Tuesday during the National Association for Home Care & Hospice (NAHC) Financial Management Conference in Chicago. “It’s going to be very unnerving, very scary, very frustrating from the beginning.”

Specifically, CMS is proposing language that requires home health agencies to — starting in 2021 — submit a notice of admission within five days of receiving a new patient. An electronic submission process would be made available, according to the agency.


Broadly, the proposed notice of admission requirement would theoretically help maintain an up-to-date common working file and avoid difficulties in “early” or “late” designations under the looming Patient-Driven Groupings Model (PDGM).

Agencies that failed to submit the notice of admission within five days would receive a wage-adjusted 30-day period payment amount that is reduced by one-thirtieth for each late day. Additionally, Medicare would not pay for days of home health services from the start date to the date of filing the notice of admission.

While CMS’s intent of proposing a notice of admission likely isn’t malicious, it contradicts with the agency’s much-publicized “Patients Over Paperwork” initiative, NAHC President William A. Dombi said during an opening address at the Financial Management Conference. At its core, the Patients Over Paperwork initiative is meant to streamline regulations and reduce red tape that weighs down the health care system.

CMS estimates that through regulatory reform alone, the U.S. health care system can save an estimated 40 million hours and $5.7 billion through 2021.

“Home health is one of the areas they would be increasing [red tape], with this new requirement where you’d have to submit a notice of admission,” Dombi said. “If you don’t do it on a timely basis, there is a penalty where you essentially lose one-thirtieth of your payment for every day that it’s late.”

The American Physical Therapy Association (APTA) is among the organizations that support the proposed notice of admission requirement.

If implemented after the formal rulemaking process, the notice of admission requirement has the potential to be overly burdensome, stakeholders argue, especially because many home health agencies may be dealing with an expanded Review Choice Demonstration (RCD) at the same time.

Indeed, the notice of admission proposal is for CMS’s benefit alone, according to Dombi.

Home health providers will have until Sept. 9 to comment on CMS’s notice of admission proposal and other suggestions.

The notice of admission proposal and the behavioral assumptions included in PDGM should be providers’ primary two issues highlighted in comments, Gaboury said.

Related to its Patients Over Paperwork initiative, CMS’s proposed rule also included a provision that would allow maintenance therapy to be furnished by physical and occupational therapy assistants.

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