This blog was co-authored by Melinda A. Gaboury, CEO and Dedra Briggs, Clinical Projects Manager.  


CMS released the CY 2021 Home Health Proposed Payment Rule in June 2020. The proposed rule is not as lengthy as in the past but does contain several updates and changes.




Patient Driven Groupings Model (PDGM) proposed payment rate changes include a significant change in wage index area designations, and an inflation rate update. The scheduled phasing out of the rural add on and continuation of outlier payment standards were also included. PDGM payment model will continue with the same structure for calculating the HIPPS code for the claim and the LUPA thresholds within that structure have not changed. Although the payment rates did not undergo a drastic change, the wage index changes will certainly impact some agencies that serve specific geographic areas following the updated census information.

The 2021 proposed base payment rates will be increased by a net Market Basket Index of 2.7% and the adjusted inflation update will be 2.7% resulting in the base 30-day payment rate increase from $1864.03 to $1911.87. Agencies that did not submit the required quality data will result in a 2% reduction of all rates.

LUPA per visit rates will be as follows: SN $153.54, PT $167.83, SLP (ST) $182.42, OT $168.98, MSW $246.10 and HHA $68.53. LUPA add-on will be continued for each discipline.

The Outlier Fixed Dollar Loss ratio will remain the same (0.56). CMS noted an error to the original publication clarifying the proposed fixed dollar loss (FDL) ratio is 0.56 and not 0.63 as originally stated in the proposed rule. The rural add-on phase-out process will continue. For 2021, low population density add-on will be 2% and high utilization areas will not receive an add on, while all other areas will receive a 1% add on.




The Wage Index is based upon the patient’s care location and was adjusted following the recent census. The census resulted in significant changes in the Wage Index in some areas and CMS proposes to cap any reductions at 5% although there is not a cap on increases. A discrepancy was noted in the wage index budget neutrality factor between tables 9 and 10 and within the text. CMS has verified the wage index budget neutrality factor of .9988 as reflected in the tables is correct and the text amount was an error. The changes include that multiple counties that were considered Rural in 2020 will be Urban in 2021 and vice versa. There are also some counties that are moving from one Urban area to another and some states have counties CBSA areas that have received title changes.




The first COVID-19 interim final rule permitted agencies to provide telehealth visits and remote patient monitoring. The 2021 proposed rule also addresses telecommunications and proposes finalization with specific Plan of Care requirements as well as amending 409.46(e). The POC must include patient monitoring or other services furnished via telecommunications and describe how the patient’s needs support the use of the technology to reach the POC goals. CMS stated the telecommunication services will not be considered as a home visit for either payment or patient eligibility and cannot be substituted for in home visits that could not be provided via telecommunications such as wound care. The agency will continue to be allowed to report the costs of telehealth as allowable administrative costs on line 5 of the agency’s cost report.

The amendment to 409.46(e) states: (e) Telecommunications technology. Telecommunications technology, as indicated on the plan of care, can include: remote patient monitoring, defined as the collection of physiologic data (for example, ECG, blood pressure, glucose monitoring) digitally stored and/or transmitted by the patient or caregiver or both to the home health agency; teletypewriter (TTY) technology; and 2-way audio-video telecommunications technology that allows for real-time interaction between the patient and clinician. The costs of any equipment, set-up, and service related to the technology are allowable only as administrative costs. Visits to a beneficiary’s home for the sole purpose of supplying, connecting, or training the patient on the technology, without the provision of a skilled service, are not separately billable.




CY 2021 Quality Reporting Program (QRP) will remain the same but 20 measures were finalized for CY 2022. The 2022 measures are based upon the OASIS items and CAHPS Home Health survey.

• OASIS based measures are ambulation, application of falls, application of functional assessment, bathing, bed transferring, drug regimen review, drug education, dyspnea, influenza, oral medications, pressure ulcer/injury, timely care, transfer of health information to provider as well as to the patient, acute care hospitalization, discharge to community, emergency department use, Medicare spending per beneficiary post-acute care, and potentially preventable 30-day post discharge readmission.

  • HHCAHPS survey-based measures are:
    • How often does the HH team give care in a professional way?
    • How well did the HH team communicate with patients?
    • Did the HH team discuss medicines, pain, and home safety with patients.
    • How do patients rate overall care from the agency?
    • Will patients recommend the agency to family and friends?




While overall the proposed rule for CY 2021 proposes only a small number of changes related to the payment model, there was the significant issue of the Request for Anticipated Payment (RAP) in 2021 that was finalized in the 2020 final rule. This change to RAPs in 2021 includes that every 30-day payment period will continue to require a RAP be filed and processed before the final claim for that period can be processed and paid and there will be NO reimbursement for those RAPs. The significant part is that there will also be a monetary penalty for RAPs that are not filed and accepted for processing within 5 days of the begin date of the 30-day period. There will be a daily rate, based on the HIPPS code value as a proportion of 30 days, that will be deducted from the final claim payment for every day up until the date that the RAP is accepted.

Example: 30-DAY PAYMENT PERIOD 01/03/21 – 02/01/21

• RAP accepted at MAC on 01/20/21 – HIPPS Code value $2,800

  • When final is paid the agency will receive the following payment:
    • $2,800 divided by 30 + $93.33 per day
    • $93.33 x 17 days (days until RAP accepted = $1,586.67
    • $2,800 – $1,586.67 = $1,213.33


The RAP issue alone is enough to warrant EVERY agency in the nation to send in comments requesting that this be changed! The Notice of Admission that will be in place in 2022 will have this penalty, but that will only be at the Start of Care. HPS is encouraging agencies to submit comments that will allow for the RAP to be penalized ONLY at the Start of Care in 2021, if at all. The comment period, for submitting any comments regarding this rule, will end on August 31, 2020.


Healthcare Provider Solutions remains dedicated to the resilience of home health and hospice and ensuring that agencies stay informed of the latest. If you should find that you need our assistance, in any capacity, please don’t hesitate to contact us.