This payment occurs when a patient is transferred/discharged and readmitted to the same home health
agency within a 60-day period. The original episode payment is adjusted according to the length of time
the patient received care and the services provided. This is a proportional payment amount based on the
number of days of service provided (i.e., the total number of days counted from and including the day of
the first billable service to and including the day of the last billable service). The readmission episode starts
a new 60-day episode for full payment.
Low-utilization payment adjustment (LUPA)
LUPA payments occur when there are fewer than five visits provided to the patient in the 60-day episode.
LUPA payments are paid per visit and not according to the home health resource group (HHRG) calculation.
Nonroutine supplies will not be reimbursed in addition to the visit payments, since total annual
supply payments are factored into all payment rates. The LUPA add-on is an additional reimbursement for
the first early episode when calculating as a LUPA episode.
Outlier payments
Outlier payments occur when the patient has received a high utilization of services greater than the average
home health services. The term “outlier” has been used by Medicare to address exceptional cases both in terms of cost and length of stay. The cost of caring for this patient is much higher than the episode’s
designated reimbursement. The combined operating and capital costs of a case must exceed the fixed-loss
outlier threshold to qualify for an outlier payment. The operating and capital costs are computed separately
by multiplying the total covered charges by the operating and capital cost-to-charge ratios. Outliers
are calculated if the total product that results from multiplying the number of the visits and the national
standardized visit rate is greater than the sum of the case-mix specific payment amount plus the fixed-loss
threshold amount. The fixed-loss threshold amount is a set percentage (known as the loss-sharing ratio) of
the amount by which the product exceeds the sum that will be paid to the HHA as an outlier payment in
addition to the episode.
HHAs do not submit anything different on their claims to be eligible for outlier consideration. The outlier
payment will be included on the remittance advice and will be identified separately on the claim in history
using value code 17, with an associated dollar amount representing the outlier payment. Medicare reimbursement
has an annual 10% cap on outlier payments per home health agency. Outlier payments cannot
exceed 10% of the home health agency’s total PPS revenue for the year
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