Revised LUPA Payment Methodology

The Centers for Medicare and Medicaid Services (CMS) has provided further clarification on the revised Medicare home health care Low Utilization Payment Adjustment (LUPA) rate calculation. The revised calculation will impact LUPA payments for episodes with a “through” date on or after Jan. 1, 2014.    

For episodes eligible for the LUPA adjustment (i.e., four or fewer visits), CMS has updated their analysis and determined what they believe is a more accurate and equitable method for applying the add-on. The new methodology, as detailed in CMS Transmittal 2828, utilizes a factor equal to the excess minutes spent in the first skilled visit to perform the initial assessment expressed as a proportion of the average minutes for all non-first visits in non-LUPA episodes. The factors breakdown by discipline as: 1.) 84.51 percent for skilled nursing; 2.) 67.00 percent for physical therapy; and 3.) 62.66 percent for speech-language pathology. Per the Medicare Conditions of Participation, only skilled nursing, physical therapy and speech-language pathologists are allowed to conduct the initial assessment visit.

Therefore, in lieu of a single LUPA add-on payment for an initial visit, Medicare will multiply each of the three disciplines (skilled nursing, physical therapy and speech language pathology) per-visit payment for the first skilled visit in LUPA episodes that occur as the only episode, or an initial episode in a sequence of adjacent episodes by the proportional increase in minutes for an initial visit over non-initial visits. The LUPA add-on factors are: 1.) 1.8451 for skilled nursing; 2.) 1.6700 for physical therapy; and 3.) 1.6266 for speech-language pathology. The CMS transmittal provides the following example: For a qualifying LUPA episode, if the first skilled visit falls under nursing, the amount for that visit would be $223.44 (1.8451 multiplied by the CY 2014 skilled nursing national per-visit payment amount of $121.10).

Contact: Patrick Cucinelli, pcucinelli@leadingageny.org, 518-867-8827