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Q: What is an outlier payment?

Homecare Insider Q&A, July 26, 2012

An outlier payment is an additional form of reimbursement made to the 60-day case mix–adjusted episode payments. It is applied for beneficiaries who incur unusually large costs due to requiring supplementary services to meet their care needs.

“Just like LUPA payments are low utilization and get a set amount per visit, outliers are high-utilization patients,” says J’non Griffin, RN, MHA, WCC, HCS-D, COS- C, of Home Health Solutions, LLC. “When a patient’s episode of care involves an unusually large number or a costly mix of visits, the HHA may be eligible for an outlier payment.”

For the provider to be eligible, imputed episode costs must exceed the payment rate by 0.67 times the standard base payment amount (a portion of which is adjusted for local wages), Griffin adds. Episode costs are imputed by multiplying the estimated national average per-visit costs by the type of visit (which is adjusted to reflect local input prices) by the number of visits by type during the episode.

“When the estimated costs exceed the outlier threshold, the HHA receives a payment equal to 80 percent of the difference between the episode payment with the threshold and the episode’s estimated costs. This is paid on the final payment to agencies,” explains Griffin. “If an agency hopes to achieve a healthy bottom line, it must eliminate outliers from the category of revenue boosters. Except for a few rare instances, outlier payments seldom bridge the gap between costs and profits.”