On February 15, 2019, the Centers for Medicare and Medicaid Services (CMS) announced that effective immediately, all new home health providers will be placed in a provisional period of enhanced oversight.
Provisional Period of Enhanced Oversight
The provisional period of enhanced oversight means that new home health providers won’t receive Request for Anticipated Payments (RAP) as part of their billing process for a minimum of 30 days, and up to a maximum of one year. During this time, payments will not be made for RAPs. However, new providers are still required to submit a RAP for each episode in order for the final claim to be processed. They will receive the appropriate, total payment for each home health episode after submitting the final claim.
Notification and Timing of Provisional Period of Enhanced Oversight
CMS or one of its contractors will mail information to new providers subjected to a provisional period of enhanced oversight identifying:
- The effective and end date of the provisional period
- Notice that while the provider is in the provisional period of enhanced oversight all RAP payments will be suppressed
- Notice that the provider must still submit a RAP for each home health episode for the final claim to be processed
Reasoning Behind the Provisional Period of Enhanced Oversight
Section § 6401(a)(3) of the Affordable Care Act (ACA) included new statutory authority for a provisional period of enhanced oversight for new providers and suppliers to the Medicare program. The provisional period is designed to help CMS address fraud, waste, and abuse concerns regarding particular providers and suppliers.
What This Means for New Home Health Providers
RAPs are upfront payments home health agencies receive before the beginning of a 60-day episode of care. RAPs were instated to help agencies partially cover costs and are paid at 50% of the anticipated total allowed reimbursement with the remaining 50% paid after the final claim. Under the provisional period of enhanced oversight, new home health agencies will not receive these upfront payments. Instead, they will have to wait for payment until after the final claim.
In conclusion, if you’re a new home health provider, this can have a major impact on your cash flow. Starting out, you’ll need to have enough cash to cover costs until you build a strong revenue cycle. Proper coding and billing with fast turnaround is extremely important for home health agencies. But in this situation, it is even more important in order to cover costs and continuously invest in growth.