CMS Announcement: LUPA Reductions in Error

Posted Thursday, March 25, 2021

The Centers for Medicare & Medicaid Services (CMS) issued Change Request (CR)12085 on March 16, 2021 indicating there may be a potential impact to reimbursement adjustments made in error beginning on January 1, 2020.

In some cases, PDGM final claims have been incorrectly identified LUPA claims and subsequently paid by the Medicare Administrator Contractors (MACs) as Low Utilization Payment Adjustments (LUPAs) instead of being paid according to the Health Insurance Prospective Payment System (HIPPS) Code.

The correction to the Common Working File (CWF) editing process is scheduled for July 2021, but in the interim agencies should be retrospectively reviewing claims that had a LUPA adjustment applied to ensure the claim was paid correctly.  If errors are found, agencies should be notifying their Medicare Administrative Contractor manually to reprocess the claims at the correct payment amount.

Any questions may be directed to Teresa Mack at

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