By the Numbers: Breaking Down Home Health LUPA Patterns

In the first three months of the year when home health agencies were adjusting to the Patient-Driven Groupings Model (PDGM), the national low-utilization payment adjustment (LUPA) rate hit 9.5%.

LUPA rates reached their height in March, when the coronavirus took the U.S. by storm.

Those were just a couple key takeaways from a BlackTree Healthcare Consulting webinar on Tuesday. The webinar broke down the impact of PDGM and the coronavirus on the home health industry.

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To some extent, LUPAs are gaining so much attention because the U.S. Centers for Medicare & Medicaid Services (CMS) crafted PDGM with built-in assumptions that home health providers would do everything possible to avoid LUPAs. That view was partially why PDGM came with a 4.36% behavioral adjustment.

“[The LUPA rate] is higher than what I think CMS was expecting,” Chris Attaya, vice president of product strategy at Strategic Healthcare Programs (SHP), said during the webinar.

National LUPA rates reached a high of 11.9%, on average, in March, when the coronavirus was at its height, according to BlackTree data.

That shouldn’t come as a shock to most of the home health industry: Earlier this year, the National Association for Home Care & Hospice (NAHC) released survey results that suggested more than 67% of all home health agencies have seen their LUPA rates at least double as a result of COVID-19.

COVID-19 threw a wrench into an already complicated LUPA landscape. Before PDGM took effect in January, providers got a LUPA if they provided four or fewer visits in a 60-day episode of care.

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Post-PDGM, there are 432 different LUPA scenarios, with visit thresholds ranging from two to six. CMS’s recently unveiled home health proposed payment rule for 2021 maintains that more complex framework.

When COVID-19 surfaced, it prompted patients to turn away visits and encouraged agencies to voluntarily opt to conduct telehealth visits when appropriate. However, virtual visits are not reimbursable and don’t count toward LUPA thresholds.

As such, home health agencies in areas hit worst by the coronavirus generally have seen the highest LUPA rates.

In Washington state, where the first U.S. outbreaks happened, the LUPA rate for the first four months of 2020 was 12.7%.

“If you look at the march numbers, that’s really when the numbers dramatically increased,” BlackTree Managing Principal Nick Seabrook said. “They went up by 60% compared to January numbers — up to 16.2%.”

Other hot spots — like New York and Massachusetts — also saw above-average LUPA rates for the first four months of the year. But even places that were less hard hit by COVID-19 — like Texas — saw LUPA rates increase marginally as a result of COVID.

LUPA rates have started to trend back down nationally after their March highs.

“The good news [is] these numbers have come down in April,” Seabrook said. “I think we’ve gotten a little bit more efficient with just how we’re caring for patients and making sure that we adapt as an industry to this ‘new normal.’ The numbers, specifically for LUPAs, are reflected in that.”

Based on the data, LUPAs appeared most likely to occur in the second period under PDGM. Rates also vary highly based on clinical grouping and LUPA threshold.

“Complex nursing, we know that’s the problem one,” “[The LUPA rate] is the highest when … [complex nursing] has a LUPA threshold of two.”

Complex nursing with a visit threshold of two saw the highest LUPA rate, on average, of 22.5% Meanwhile the wound clinical grouping with a LUPA threshold of two saw the lowest LUPA rate of 4.9%. 

*Editor’s note (July 1, 2020): An earlier version of this story incorrectly stated that there were 216 different LUPA scenarios under PDGM. HHCN has updated the story to reflect the correct LUPA landscape. 

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