LUPAs get trickier under latest PDGM recalibration, tighter reimbursement

Managing lower utilization payment adjustments, or LUPAs, is always tricky business for home health agencies, and SimiTree financial experts say the stakes will be even higher for case mix strategy under next year’s tighter Medicare reimbursement.

Medicare tweaked LUPAs as part of its annual Patient Driven Groupings Model (PDGM) case mix recalibration for 2023. In a year with a slender, 0.7 percent Medicare rate hike, the recalibrated LUPAs mean home health agencies will need to keep a more watchful eye on visit numbers to avoid losing hundreds of dollars per patient.

Thinner margins increase the importance of tracking visits, evaluating reasons for any missed visits, and staying on top of the decision to discharge a home health patient, according to SimiTree Principal Rob Simione.

LUPA management and visit utilization are increasingly significant, and agencies need to make certain their staff is aware of the financial impact,” Simione said.

15 days: The number to watch

Simione and other SimiTree consultants recommend agencies educate clinical managers in particular about the potential financial consequences of LUPAs.

They say care team members should prioritize effective case management that incorporates efficient scheduling and encourages better clinical outcomes while remaining cognizant of the financial risk.

In many cases, utilization decisions require weighing complex clinical factors and unique patient circumstances to determine the best course of action rather than following a predetermined or routine care path. In all cases, utilization requires consistent monitoring of the situation.

The financial risk may be greater in certain higher acuity cases where visits are typically frontloaded, with more visits scheduled at the beginning of treatment. As visits taper off and the episode of care enters the second 30-day billing period, the risk of a LUPA increases.

If the agency hasn’t seen a patient in 15 days, we need to take a serious look at why,” Simione said. "What are we missing? Should we even be seeing that patient any longer? Should we discharge?”

Each case is different

In some cases, Simione said, adding the final visits to the first 30 day period rather than the second might improve patient outcomes as well as avoid a LUPA.

Or it may enable the agency to discharge and accept an order for another patient to begin service in what would have been that second 30-day period,” he said.

On the other hand, with a full 60-day episode of care, there’s no reason to scrunch all visits into a 30-day window of time and discharge too soon, before the patient is ready.

“Each case is different, and each requires the provider to monitor and evaluate and make the right decisions based on where we can add value,” Simione said.

Effective management begins with a thorough comprehensive assessment, he said, to determine which additional disciplines may be needed so that orders can be obtained rapidly and services to the patient can begin promptly.

SimiTree is currently beta-testing a new data analysis tool to assist with utilization planning based on OASIS determined acuity level of the patient, important components of value based care, and other factors.

Finding the value

Remote patient monitoring and telehealth visits can also be important tools for agencies trying to improve the management of each 30-day period, Simione said. Effective coding practices and scheduling of interdisciplinary services to fully support skilled care, such as social work services when needed, are equally important.

Despite these efforts, some LUPAs can’t be avoided. Patients are going to refuse care, staffing issues are going to crop up, and acute care hospitalizations are going to interrupt the home health episode without a return to agency care.

SimiTree can help

What will new case mix recalibrations under PDGM mean to your operation? SimiTree offers a complete PDGM Impact Analysis that can answer all your questions, and our financial consultants can help you determine the best course of action for ensuring profitability and growth despite leaner margins in 2023. Our full operational assessments will help you with efficient scheduling and workflow, and assist you in determining how to effectively use telehealth.

Use the form below to reach out to us today, and let’s get started making your agency stronger and healthier.

Are you an Insider?

Our free monthly report offers industry insight and analysis from SimiTree experts. Sign up here to get helpful articles like this one in your inbox each month.

Contact Us

Let's work together to improve the health of your organization. At SimiTree, we balance financial expertise and clinical excellence to help our clients grow. How can we help you? Call us at 866.839.5471 or complete the form below.