Metrics Matter: What Percentage of Your Home Care Patient Episodes Are Subject to LUPA?

This month’s metric takes a look at the percentage of home care patient episodes that meet the criteria for the Low Utilization Payment Adjustment (LUPA) at the state level. According to the LUPA regulation, Medicare patients who receive less than five visits in an episode are reimbursed on a per-visit basis. The reimbursements for these types of episodes nationally are only about 12% of those for Medicare patients who qualify for the episodic Home Health Resource Group (HHRG) rate. Yet home health providers still must incur all the typical per-patient costs for patient episodes that qualify for LUPA, including intake, initial assessment, medical records, discharge assessment and billing. The net effect? These patient episodes are financially unattractive to home health agencies.

Leading Healthcare Market Research Specialists, HealthMR, share a graph of percentages of episodes subject to LUPA.

By looking at Healthcare Market Resources data of the percentage of episodes that are subject to LUPA regulation on a state level – compiled from the 2006 Medicare claims database – we can conclude the following:

  • The variation among state averages for the percentage of episodes that are subject to LUPA is significant, with the highest quartile (16.3%) being more than 100% higher than the lowest quartile (7.9%)—more than a 100% variance.
  • The national average of 12.3% of episodes subject to LUPA falls roughly between the highest and lowest quartiles.
  • Variations between the individual states are even greater. For example, Oregon has the highest LUPA percentage at 20.9%, while the District of Columbia has the lowest percentage at 2.6%.

This disparity in the percentage of episodes subject to LUPA is not surprising since healthcare is a local business and home health agencies do not control:

  • Where the patients are referred
  • The types of patients who are referred to them
  • At what point in the disease process patients are referred.

By also looking at data that shows the percentage of chronic patient episodes, it appears that states with a higher percentage of chronic patient episodes have a lower percentage of episodes subject to LUPA. The difference between Oregon at 20.9% (which has a lower percentage of chronic patient episodes) and the District of Columbia at 2.6% (which has a higher percentage of chronic patient episodes) indicates the explanation may not be that simple.

In order to set realistic and competitive operational efficiency goals, it is important that providers be aware of where they stand both regionally and nationally in terms of the percentage of episodes that are subject to LUPA regulation. If your LUPA percentage is above the average in your state, you may want to determine whether your marketing and intake guidelines are consistent with your financial objectives. Click here or call us at 215-657-7373 to learn more about this metric and other ways Healthcare Market Resources industry data can help your agency succeed today.