A Way Forward for RAPs

While some of the news around CMS’ release of the payment rule for CY 2021 has been positive, many home health agencies are likely bristling at new policies around the Requests for Anticipated Payment (RAPs) for 2021 and beyond.

Plan to Remove RAPs
RAPs, which are home health-prepayments that cover a large portion of reimbursement for an episode when care begins, look to be a thing of the past.

CMS has decided to continue its plan to completely eliminate RAPs by 2021. The agency plans to replace these bulk, up-front payments by instead requiring agencies to submit a singular Notice of Admission (NOA) — a practice scheduled to start in 2022. This would effectively treat 2021 as a transition year where home health billers and home health coders would have to submit a simpler RAP. According to CMS,
“…we relaxed the required information for submitting the RAP for CY 2021 and stated that the information required for submitting an NOA for CYs 2022 and subsequent years would mirror that of the RAP in CY 2021” [1]

This could spell bad news for home health agencies, especially those that are smaller or are having cash flow issues, especially during a pandemic. This is expected to pose a specific threat to mom-and-pop home health agencies who may rely on pre-payments more heavily and who can’t afford to have them disrupted. Unfortunately, CMS has also included a penalty for late submissions.

The Penalty for Home Health Agencies
For both RAP in 2021 and the one-time NOA submissions in 2022, both are subject to a 5-calendar day deadline from the beginning of care. If an agency doesn’t meet this deadline, they face a reduction of about 3% for every day they’re late — one-thirtieth of the wage and case-mix adjusted 30-day period payment for each day from the day care begins until the date the agency submits the RAP or NOA.

While this doesn’t seem severe, agencies with timely issues or less efficient workflows can see their penalties add up fast. Commenters on the rule have already asked for clarification. According to Home Health Care News, CMS offered this insight,
“For purposes of determining if a “no-pay” RAP is timely-filed, the no-pay RAP must be submitted within five calendar days after the start of each 30-day period of care. For example, if the start of care for the first 30-day period is Jan. 1, then the no-pay RAP would be considered timely-filed if it is submitted on or before Jan. 6…” [1]

The Exceptions
That said, there are exceptions, as outlined in 42 CFR 484.205(i)(3). Some of the reasons include disasters and contractor systems issues that are outside of the agency’s control. As stated in the Federal Register,
“A home health agency must fully document and furnish any requested documentation to CMS for a determination of exception. An exceptional circumstance may be due to, but is not limited to the following:

  • Fires, floods, earthquakes, or similar unusual events that inflict extensive damage to the home health agency’s ability to operate.
  • A CMS or Medicare contractor systems issue that is beyond the control of the home health agency.
  • A newly Medicare-certified home health agency that is notified of that certification after the Medicare certification date, or which is awaiting its user ID from its Medicare contractor.
  • Other situations determined by CMS to be beyond the control of the home health agency.” [2]

Moving Forward
We suggest that all home health agencies take these changes very seriously and take immediate action. While you do have a year to prepare, for smaller agencies especially, it will be critical that you take a proactive approach to assessing your risk and making a transition plan. Here are some suggestions:

Review your RAP submission processes
Now is the time to identify any workflow issues you have that might result in late penalties. By identifying lags in RAP submissions you have now, you will be able to get ahead of the NOA timely filing requirements.

Detail financial impact
It will be highly important to understand how your revenue is impacted by RAP payments. By putting together a picture of that now you will be better prepared to navigate the transition year and move to NOA submissions in 2022. Make sure you’re keeping track of your most important KPIs and watching them over the transition period.

Plan for a transition year
2021 will likely be a year for considerable changes in your submission processes. Begin talking with your leadership team to come up with a transition plan that will allow you to move smoothly from RAP to NOA with the least financial impact possible.

Plan for a future of NOA
To minimize the impact of this shift, make sure you’re prioritizing communication with your billers and coders and emphasizing the importance that timely filing plays for the financial health of your organization. You may want to consider additional training to ensure that everything is ready for when RAP fades away completely.

If you anticipate challenges with your home health billing and home health coding and would like to consider working with an outsourced organization who already understands the challenges around RAP and NOA, contact us to get started on the right path.

[1] R. Holly, “Late RAPs Could Trigger Immediate 20% Payment Reduction in 2021,” Home Health Care News, 1 November 2020. [Online]. Available: https://homehealthcarenews.com/2020/11/late-raps-could-trigger-immediate-20-payment-reduction-in-2021/.
[2] Code of Federal Regulations, “§ 484.205 Basis of payment,” December 2020. [Online]. Available: https://ecfr.federalregister.gov/current/title-42/chapter-IV/subchapter-G/part-484/subpart-E/section-484.205.

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