Low Utilization Payment Adjustment (LUPA)

Published 06/12/2021

With the implementation of Patient-Driven Groupings Model (PDGM), the Low Utilization Payment Adjustment (LUPA) thresholds changed from four or less visits to a threshold that ranges between two and six visits. Under PDGM, each of the 432 case-mix groups has a threshold to determine if the period of care would receive a LUPA. On Medicare claims, these case-mix groups are represented as Health Insurance Prospective Payment System (HIPPS) codes.   

Under PDGM each of the case mix groups has a threshold to determine if the period of care would receive a LUPA. For periods of care beginning on or after January 1, 2020, if a home health agency provides fewer than the threshold of visits specified for the period’s HHRG, they will be paid a standardized per visit payment instead of a payment for a 30-day period of care. Payments for 30-day periods with a low number of visits are not case-mix adjusted, but instead paid on a per-visit basis using the national per-visit rates.

Case-Mix Adjustment

Case-mix adjustment payment for 30 day periods are made using 432 possible groups. In particular, 30-day periods are placed into different subgroups for each of the following five categories:

  1. Admission source (two subgroups): community or institutional admission source
  2. Timing of the 30-day period (two subgroups): early or late
  3. Clinical grouping (twelve subgroups): musculoskeletal rehabilitation; neuro/stroke rehabilitation; wounds; Medication Management, Teaching, and Assessment (MMTA)
    1. surgical aftercare; MMTA — cardiac and circulatory; MMTA — endocrine; MMTA — gastrointestinal tract and genitourinary system; MMTA — infectious disease, neoplasms and blood-forming diseases; MMTA — respiratory; MMTA — other; behavioral health; or complex nursing interventions
  4. Functional impairment level (three subgroups): low, medium or high
  5. Comorbidity adjustment (three subgroups): none, low or high based on secondary diagnoses.

LUPA Threshold Changed to a Variable Threshold
Medicare makes a LUPA payment for 30-day periods where the number of visits is below the case-mix group’s threshold.

  • Each of the 432 case-mix groups has a threshold that determines if the 30-day period gets a LUPA
  • For each case-mix group, the 10th percentile value of visits is used to create a case-mix, group-specific LUPA threshold with a minimum threshold of at least two for each group
  • Medicare pays for a 30-day period with a total number of visits below the LUPA threshold per-visit rather than paying the case-mix adjusted 30-day payment amount

LUPA Thresholds are current found on the CMS Home Health Agency (HHA) Center webpage, as a downloaded file.

For LUPA periods that occur as the only period or the first period in a sequence of adjacent periods for a patient, Medicare makes an increased payment for the front-loading of assessment costs and administrative costs.

A RAP is not required for LUPA periods of care; however, it is more challenging to predict when a period of care will result in a LUPA since it’s based on variable thresholds. If a RAP is filed for a LUPA, the RAP must be filed timely.


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