Home Health: 10 Percent Limit on Outlier Payments

Home health prospective payment system (PPSP) payment groups are based on averages of home care experience. An outlier payment is made when a case is outside of the averages due to unusually high levels of services in a 30-day period of care. (An outlier payment is identified on the claim by value code 17.)

Question: Is there a limit on outlier payments?

Answer: Yes 

In each calendar year, outlier payments cannot exceed 10% of the HHA’s total PPS payments. If outlier payments are less than the 10 percent limit (and paying this outlier would not cause the 10 percent limit to be exceeded), the outlier is paid normally. If outlier payments exceed the 10% limit, the outlier is not paid. (However, the regular HH PPS amount is paid.) 

Question: Can unpaid outliers be paid later?

Answer: Yes
As subsequent claims can alter how outlier payments compare to 10% of total payments, there is a reconciliation process. This occurs quarterly in the claims processing system. If outlier payments are less than the 10 percent limit (and the outlier would not cause the 10 percent limit to be exceeded), additional outlier payments are made.

Reference: CMS Publication 100-04, Medicare Claims Processing Manual, Chapter 10, Section 10.1.21, Payment Adjustments — Outlier Payments (PDF).