An ‘Awkward Transition Year’: Why 2021 Will Look Different in Home Health with New RAP Adjustments

The U.S. Centers for Medicare & Medicaid Services (CMS) issued its final 2021 home health payment rule in late October. When it came out, some providers were less than pleased.

On one hand, the Patient-Driven Groupings Model (PDGM) wasn’t substantially altered to balance out its flawed behavioral assumptions. On another, there are also a few “quirks” in the rule that will make 2021 a unique, potentially complicated year.

Overall, the final rule adds an estimated $390 for home health agencies next year, roughly equal to a payment increase of 1.9%. Those figures are less than the $540 million boost and 2.6% increase initially floated in CMS’s proposed rule.


Since the final rule came out, providers have additionally learned more about the fines tied to late Requests for Anticipated Payment (RAPs). Although RAPs are being phased out next year, providers will still be required to submit a “no-pay RAP” within five calendar days of the start of care.

Under the Prospective Payment System (PPS), agencies could receive 50% to 60% of their payment up front. This year, that was lowered to 20% for existing agencies, with new agencies being shut out from RAPs.

In 2021, there will be no payment tied to the RAPs for anybody. Once RAPs are fully phased out in 2022, the Notice of Admission (NOA) will take its place.


“So this was a pretty standard annual update from Medicare, especially if you consider what we went through last year with the transition to PDGM,” Matt McGowan, a consulting manager at McBee Associates, said on a recent webinar. “But we have to go through this kind of awkward transition year with the RAP in 2021, which is a blend between the RAP that you’re used to and what the process will be under the NOA in 2022.”

Wayne, Pennsylvania-based McBee Associates is a health care services and consulting firm that offers financial, operational and clinical help to health care providers across the continuum.

Despite RAPs being phased out, submitting them is still a way for CMS to keep track of home health patients and whether they can be funded exclusively through Medicare’s home health benefits. The agency has incentivized providers to keep submitting these RAPs by instituting those fine measures, which count all the days after the first day as a fine if a provider misses the five-day window.

In other words, a RAP fine only comes after the fifth day, but if providers submit on the sixth day, they will be docked one-thirtieth of the payment for each of those five days as well, which comes out to a 20% fine.

That — and other quirks in the final rule — will put a couple of landmines in home health providers’ way in 2021.

For instance, because RAPs are no longer providing payment, but RAP submissions are still required, that changes the entire coding process for providers.

“Now that there’s no money tied to the RAPs, Medicare is telling us that we don’t need to wait until the OASIS and the coding are completed in order to submit the RAP,” McGowan said. “Once you have that order in and the first visits completed, just go ahead and submit the RAP.”

That marks a significant change in agencies’ operational processes and workflow. But there are still certain coding requirements tied to the RAP in 2021.

“Here’s where we get into that awkward transition issue, because the RAPs still need to have a primary diagnosis code on them and the HIPPS code,” McGowan said. “Medicare is not going to be using that primary diagnosis code on the RAP or the HIPPS code for anything, so we can submit a generic primary diagnosis code — like hypertension — on all RAPs.”

So, because the code will be less important up front, agencies can submit a generic HIPPS code like 1AA11 on all RAPs.

But that’s not where the quirkiness ends in the 2021 submission process. After the first visit, RAP submission, ICD-10 coding, OASIS QA and documentation are all completed, there is one more element to pay attention to.

“When you do submit that final claim, it has to have the same HIPPS code that was used on the RAP — the HIPPs code on the RAP and the final claim still needs to match,” McGowan said.

Even though CMS is not using that HIPPs code for anything, that’s a rule that will be carried on in 2021, so it’s imperative that a provider keeps those codes aligned.

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