LUPA (Low Utilization Payment Adjustment)

Every case-mix group under the Patient-Driven Groupings Model (PDGM) has its own LUPA threshold, ranging from 2 to 6 visits per 30-day period. Deliver at least the threshold number of visits and the period pays the full case-mix amount; deliver fewer and every visit is paid at a wage-adjusted national per-visit rate for its discipline. The determination is made per period, so the first period of a certification can pay in full while the second becomes a LUPA. Thresholds are recalibrated annually, most recently in the CY2026 final rule using CY2024 data. When a LUPA occurs in the first or only period of a sequence, Medicare adds a LUPA add-on payment to the first skilled visit to reflect assessment costs.

The gap between full period payment and per-visit LUPA payment is large, while the agency's costs barely change: the comprehensive assessment, OASIS, coding, care planning, and billing work happen either way. A LUPA period often costs more to serve than it pays. A few LUPAs are clinically appropriate, but an elevated LUPA rate is usually an operations signal, not a clinical one. Agencies should track LUPA rate by period position, discipline mix, team, and referral source, and treat unexplained variation as a scheduling and visit-completion problem to solve.

Avoidable LUPAs are mostly a visibility and follow-through problem:

• Surface each period's threshold and running visit count to schedulers and clinical managers in real time
• Reschedule missed visits within the period instead of letting them disappear
• Watch period boundaries: a visit delivered on day 31 counts toward the next period, not the one that needed it
• Plan frequencies so medically necessary visits are not bunched at the start of a certification, leaving the second period thin
• Confirm weekend and on-call coverage for patients sitting one visit above threshold

The guardrail: never add a visit without clinical justification. Padding visits to dodge a LUPA is a program integrity problem.

Both adjustments reduce a period's payment, but they answer different situations. A LUPA is about volume: too few visits in the period, paid per visit. A Partial Episode Payment (PEP) adjustment is about interruption: the patient transferred to another home health agency or was discharged and readmitted within the same 30-day period, so the payment is prorated for the portion of the period the agency was responsible for. A LUPA is often preventable with better scheduling discipline; a PEP usually reflects patient events outside the agency's control, though intake and discharge decisions influence both.