Palmetto GBA, the largest home health and hospice Medicare Administrative Contractor (MAC) has taken steps to suppress payments to home health agencies identified as having a “high number” of auto-cancelled Requests for Anticipated Payment (RAP). The National Association for Home Care & Hospice (NAHC) learned that RAP payments are being suppressed for 298 home health agencies because they failed to submit final claims as required, resulting in RAPS being auto-cancelled between January and April 2013. The targeted agencies had 100 or more RAPS auto-cancelled. Several agencies had more than 1,000 RAP cancellations and at least one had over 4,000.

For these home health agencies, “RAPs will be set to pay at zero percent. The payment suppression will continue until a Corrective Action Plan is submitted and the provider can demonstrate improvement in timely billing of final claims.”

According to the Palmetto GBA bulletin informing home health agencies of RAP payment suppression, “Providers are given the greater of 120 days after the start of the episode or 60 days after the paid date of the RAP to submit the final claim. If the final claim is not submitted within the specified time, the RAP will auto-cancel and the provider must resubmit the RAP before submitting the final claim.”

The bulletin goes on to say that instances of “RAP auto-cancelled for no submission of a final claim should be minimal.” In addition to agencies notified of immediate RAP payment suppression, warning letters are being sent to agencies that had between 50-100 auto-cancelled RAPs during the same time period, notifying them that their current billing practices are unacceptable, and that their RAPs are being monitored. If improvement is not noted, their future RAPs may also be set to pay at zero percent.

Palmetto GBA is the only MAC suppressing RAP payments at this time. However, all MACs have the authority to do so. According to Medicare regulations:

409.43(c)(ii)(2) Reduction or disapproval of anticipated payment requests. HCFA has the authority to reduce or disapprove requests for anticipated payments in situations when protecting Medicare program integrity warrants this action. Since the request for anticipated payment is based on verbal orders as specified in paragraph (c)(1)(i) and/or a prescribing referral as specified in (c)(1)(ii) of this section and is not a Medicare claim for purposes of the Act.

Palmetto GBA intends to monitor the performance of targeted agencies and will restore payments if improvement occurs. NAHC has learned that home health agencies have experienced increased difficulties meeting the 120 timeline for final claims because of difficulties obtaining Face-to-Face encounter documentation from physicians in a timely manner. Other reasons why agencies may have delayed submission of final claims include billing system or personnel problems.

Agencies with suppressed RAP payments are expected to face severe financial hardships as they continue to deliver services and pay their personnel without any financial remuneration until episodes of care are completed. In order to keep the time under RAP suppression, these agencies should determine whether they were correctly targeted by analyzing their PS&R. If an error was made, they should call Palmetto GBA immediately to request that the RAP suppression be lifted.

If a high rate of RAP auto-cancellations are identified, agencies should conduct an immediate in-depth assessment of potential causes. Once completed, a corrective action plan should be developed and submitted to Palmetto GBA as soon as possible. The corrective action plan should offer details of root causes and how they will be corrected. In the plan agencies should address such issues as: software enhancements, improved billing policies and practices; and allocation of additional resources to obtain physician signatures on certifications and plans of care.

Any agencies that are impacted by RAP suppressions may send an email to mts@nahc.org.