Home health agencies hoping the industry will derail the Centers for Medicare & Medicaid Services (CMS) in its quest to eliminate pre-payments shouldn’t hold their breath.

In its July 11 proposed payment rule, CMS floated plans to phase out Requests for Anticipated Payment (RAPs) starting next year and eliminate them completely by 2021. The agency is marketing the move as yet another step to reduce fraud, waste and abuse in the home health industry, the only health care sub-sector where providers can receive a sizeable chunk of their reimbursement before services are actually delivered.

But home health providers of all shapes and sizes lean heavily on RAPs to pay bills and make payroll. Phasing them out, experts say, would only add significant financial pressure to agency operations at a time when the Patient-Driven Groupings Model (PDGM) also looms large.

As currently structured, PDGM includes an assumption-based behavioral adjustment of 8.01%, though the National Association for Home Care & Hospice (NAHC) and other advocacy groups are working hard to change that.

NAHC President William A. Dombi and Mary Carr — the organization’s VP of regulatory affairs — highlighted those ongoing efforts and CMS’s RAP plans earlier this week.

In fact, the NAHC leaders actually recalled a recent conversation they had with CMS Administrator Seema Verma and her team.

“When we finished our discussion about the behavioral adjustment, [Verma] asked, ‘Is there anything we can do to help out small agencies?’” Dombi said during an open forum at NAHC’s annual conference, held this year in Seattle. “I said, ‘Well, would you reconsider your proposal on the RAP?’ Her No. 2 guy, suddenly his eyes [opened wide] and he stood up straight in his chair. There was a ‘no-way’ look on his face.’”

So far, there appears to be “a very limited chance” of CMS dropping its RAP plans, Dombi said.

“When you look at it, even in a 30-day unit, how many RAPs can you drop and get paid on before [CMS] can find out you’re a phony? A real lot — millions, if you wanted to,” he said. “They’ve convinced themselves that this is a necessary action to take to stop a fraudulent scheme that they’ve uncovered.”

In reality, RAP fraud isn’t widespread and is committed by a handful of bad actors, Dombi said.

Specifically, home health providers can receive up to 60% of their anticipated payment at the beginning of a patient’s care episode through a RAP. CMS is proposing to reduce that to 20% for existing home health agencies in 2020 before scrapping RAPs in 2021.

Asking CMS to change its mind on RAPs seems like squeezing blood from a stone at this point, but NAHC is pursuing strategies to at least mitigate the impact.

Among its suggestions, NAHC is encouraging CMS to pursue a RAP phaseout — if it absolutely has to — through a more targeted approach.

NAHC is also urging CMS to, at minimum, give providers more time to prepare for a phaseout, preparations that could include developing cash reserves or taking out new or larger lines of credit.

“This is very concerning because agencies have not been prepared for [a phaseout],” Carr said during an opening presentation at the conference. “They’re not financially ready for this.”

As part of a RAP phaseout, CMS is simultaneously proposing to install a notice-of-admission requirement that would require providers to submit a notice to CMS within five days of receiving a new patient.

Providers would have five days to submit the notice of admission; failure to do so would result in a wage-adjusted, 30-day-period payment amount that is reduced by one-thirtieth for each late day.

In other words: a financial penalty that would be extremely difficult to avoid.

“As you know, the RAPs submission requires a signed plan of care or at least a plan of care established and submitted to the physician. Agencies would never be able to do that with [a notice of admission] within five days,” Carr said. “Even CMS has admitted that the median days-for-submission of a RAP is about 12 days for an agency. So, obviously, this is going to be way too much for agencies to comply with.”

On its end, CMS is couching the notice-of-admission requirement as a way to help keep track of “early” and “late” designations under PDGM.

Unlike the industry’s campaign to attack PDGM’s 8.01% behavioral adjustment, there’s little interest among members of Congress to rally around RAPs, according to Dombi.

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