Understanding The Mysterious LUPA

One Customer’s Experience

A few weeks ago, a customer contacted our Support Center with a bad wintertime case of “billing confusion.” She had been reviewing her Medicare remittance advices and had noted that for one of her patients, she had received a reimbursement of only about $500, when, in fact, she had been expecting a reimbursement of around $2800. When I looked a little bit deeper at the claim, I spotted the reason for the discrepancy and explained that the patient’s episode was a LUPA. “A LUPA?” she replied, seemingly puzzled.

Unfortunately, her puzzlement at my response was not uncommon. Most of us in the home health industry have become familiar over time with the many acronyms used in our business – SOC, ROC, TIF, OASIS, HHRG, HIPPS, RAP, and many others. Indeed, we seem at times to speak a foreign language!

However, one acronym in particular – LUPA – seems to be a source of perpetual confusion for many of our clients. The term itself stands for “Low Utilization Payment Adjustment,” which seems simple enough. However, the real significance of the LUPA comes into play in terms of how we are reimbursed for patient care.

That said, let’s take a look at a “typical” episode of care in terms of reimbursement and then contrast that to the LUPA.

A Typical Episode

For most home health episodes of care, we generally see the patient for a series of weeks. In many instances, one or more disciplines work together, and frequently we recertify our patients to meet their ongoing care needs. For example, a typical frequency and duration might be 1W9 for nursing and 2W5 for physical therapy. This would, of course, result in our agency performing quite a few patient visits – 19 in the above example. In this instance, we would be reimbursed “episodically.” In other words, Medicare would pay us a set “episode” amount for our care. That amount would reflect the acuity or “case mix” of the patient based upon the OASIS assessment and episode timing. For 2014, the national standardized base fee for a 60 day episode is $2,869.27.¹

The LUPA Episode

In some instances, the “rules” we talked about above don’t apply. The LUPA is one such example. In a LUPA episode, the home health agency sees the patient for 4 or fewer total visits. Therefore, these episodes are “low utilization” (i.e. not “utilizing” much of our resources.) Accordingly, Medicare deems these episodes as necessitating a “payment adjustment.” Thus, we end up with the LUPA episode. As mentioned above, the LUPA episode occurs when 4 or fewer billable visits are performed. It is important to note, however, that all billable visits, regardless of discipline, count toward meeting the visit threshold. This includes visits by nursing, social work, home health aides, and physical, occupational, or speech therapy. In the event a LUPA episode occurs, the agency is not reimbursed “episodically,” but instead on a per visit basis. For 2014, the national per visit amounts before wage index adjustments are found in the table below²:

In addition to these per visits rates, if a home health episode occurs as the only episode or “as the initial episode in a sequence of adjacent episodes,” the home health agency will receive a small additional payment to compensate for the disproportionate upfront costs incurred in establishing patient care. Bottom Line: If you end up providing 4 or fewer visits during a 60 day episode, you can expect a substantially reduced reimbursement vs. your traditional episodic payment.

Causes And Prevention Of LUPA Episodes

The causes of LUPA episodes are many and varied. In some instances, the agency knows up front that the planned frequency and duration will result in a LUPA. An example of this would be a patient with a history of neurogenic bladder who requires Foley catheter changes only once every 30 days. Absent any untoward genitourinary complications, an agency would obviously expect to provide fewer than 4 billable visits in a 60 day episode. Equally, sometimes LUPA episodes occur when a patient refuses further care. In both of these instances, little can be done to prevent the LUPA episode. However, one cause of LUPAs stands out among the rest: the LUPA episode which occurs when a new home health patient is readmitted to an acute care facility and subsequently never returns to the agency’s care. Think for a moment about all the negative consequences which happen in those circumstances. The patient returns to a higher level of care. The overall cost to our healthcare system increases exponentially. Confidence in your agency’s ability to provide post-acute care may be lessened. And, of course, you end up with a LUPA episode. The moral of the story here is to consider closely the clinical needs of high risk post acute patients. The front loading of visits within the first week of care is likely to be beneficial to both the patient and your agency.

Final Thoughts

The LUPA, like the SOC, ROC, TIF and all the rest of the acronyms is no doubt a part of the home health landscape. The astute home health operator will recognize that sometimes it is an inevitable outcome, but too will take steps to avoid an excessively high number of LUPA episodes. Most importantly, when a LUPA episode does occur, he or she will recognize the mechanics of the changed reimbursement equation and be able to interpret the remittance advice with confidence.

1,2: Source: Federal Register, Volume 78, No. 231, December 2, 2013