Typically the Home Health and Hospice Medicare MACs follow each other when one begins a new review, develops a new LCD, etc. Palmetto GBA (PGBA) is the largest Medicare MAC and tends to take the lead in many areas. So, even if you are not a PGBA provider, you should read this blog.

A few years ago PGBA began a review of agencies that had a level of 100 or more Request for Anticipated Payment (RAP) Take-backs in one calendar quarter. They sent agencies that fell into that category, a letter stating that they must file a corrective action plan and that RAP payments were suspended until PGBA determined that the situation had improved. PGBA treated everyone the exact same. So if you were an agency that typically files 800 RAPs per month or an agency that files 100 RAPs per month and you had 100 RAP take-backs in a calendar quarter you were on the list. So 4% vs 33% were treated the same. State and national associations got involved and convince PGBA authorities that they had to come up with a different strategy due to the fact that just using a number of take-backs was totally not equal for all providers. So, once PGBA approved the corrective action plans for the initial agencies they began paying RAPs again.

The review has continued. Currently, each quarter PGBA sends letters to agencies that have 25%+ take-backs in one calendar quarter a warning letter that states your denial percentage is elevated and that you are on the radar. The following quarter you typically receive the same letter if your percentage is still elevated. The third quarter you will receive the letter that requires a corrective action plan and your RAP payments will cease until PGBA see improvement in the percentage of take-backs.

The Corrective Action Plan (CAP) should contain the following:

  • A statement of the problem or weakness that caused the delay in filing final claims
  • Proposed solutions to the problem
  • State who is responsible for monitoring the CAP
  • Any important information is useful

Providers are encouraged to monitor their outstanding RAPs to ensure the final claim is submitted timely. This will assist the provider in determining if changes are needed to their processes to avoid a high rate of RAPs that are canceled because the final claims is not submitted on time. The higher the percentage of RAP cancellations, the more at risk the provider is of having their RAPs set to process with zero payment.

The calculation examples below are intended for training purposes only and do not reflect an actual situation where a provider’s RAPs were set to process with zero payment. Providers may use the calculation formula to assist them with determining the frequency at which they will monitor their RAP cancels versus the total number of final claims processed.

1. June 1 to June 31

Total RAPS canceled = 5

Total Final claims processed = 25

Percent of RAP cancels versus total final claims processed = 20%

2. July 1 to July 31

Total RAPS canceled = 15

Total final claims processed = 25

Percent of RAP cancels versus the total final claims processed = 60%

When this all began a few years ago, agencies began to focus on the issue and guidance from Palmetto GBA staff was to go into the system and cancel the RAP proactively and the cancellation would not be used to calculate your take-back percentage. HPS was very hesitant to advise that this practice was acceptable. However, the consistent response from phone calls to PGBA was that agencies should just cancel. HPS was convinced that one day this would be taken into account when calculating the take-back percentage.

Well, the day has arrived! PGBA held a teleconference recently that addressed the RAP take-back reviews. They specifically stated that it is NOT ACCEPTABLE for agencies to be going in and cancelling RAPs for the sole purpose of avoiding the increase in your RAP cancellation percentage. They further stated that the number of cancellations, regardless of why cancelled, will be monitored.

The answer to avoiding this level of review from PGBA is monitoring your agency’s filing of final claims….getting ahead of the curve by constantly monitoring the receipt of signed physician orders, etc. Please avoid even more stringent reviews by discontinuing the practice of cancelling RAPs for the sole purpose of decreasing your take-back percentage.