CMS Issues Plans for Pre-Claims Review for Home Health Agencies
June 9, 2016 11:48 AM
The Centers for Medicare & Medicaid Services (CMS) has posted in the Federal Register a Notice announcing a 3-year Medicare pre-claim review demonstration for home health services in the states of Illinois, Florida, Texas, Michigan, and Massachusetts where there have been high incidences of fraud and improper payments for these services.
The proposed demonstration will begin in Illinois not earlier than August 1, 2016, will begin in Florida not earlier than October 1, 2016, and will begin in Texas not earlier than December 1, 2016. The demonstration will begin in Michigan and Massachusetts not earlier than January 1, 2017. Providers in each state will be notified by the appropriate Medicare Administrative Contractor (MAC) prior to the start of the demonstration in the state.
The details of the demonstration are still not clear. However, CMS seems to be moving away from the concept of a “preauthorization” demonstration, that was originally proposed, to a “pre- claim review” demonstration where the agency will submit a pre-claim review request to receive a determination regarding eligibility and coverage before submitting a claim. The main driver for the demonstration remains efforts to reduce improper payment related to insufficient documentation.
Under this demonstration, CMS states the home health agency (HHA) “will be encouraged to submit to the relevant MAC a request for pre-claim review, along with all relevant documentation to support Medicare coverage of the applicable home health level of service.
After receipt of all relevant documentation, the MAC will review the pre-claim review request to determine whether the service level complies with applicable Medicare coverage and clinical documentation requirements.” For initial reviews, CMS plans to instruct the MACs to make all reasonable efforts for a determination and issue a notice of the decision within 10 business days.
If the MAC declines payment after review, the agency may amend and resubmit the review request an unlimited number of times. For subsequent pre-claim review requests, the MAC will conduct a “complex medical review” and will be expected to make all reasonable efforts to have a decision within 20 business days.
It is unclear what documentation CMS will be requiring and reviewing for the pre- claim reviews and how, or if, the initial review will differ from subsequent reviews. CMS specifically states that a “complex medical review” will be conducted for the subsequent reviews, but implies it for initial reviews.
If an agency submits a claim for payment without a pre-claim review decision, CMS will apply a 25 percent payment reduction for claims deemed payable. In addition, HHAs that have had a pre- claim decision, must submit the pre-claim review number on the claim in order to avoid a 25 percent payment reduction.
CMS will process a Request for Anticipated Payment (RAP) submitted by the agency so services may begin while waiting for the decision on the pre-claim review request. There is no indication, in the Notice, that agencies must request a pre-claim review within any specific time frame as long as it is prior to submitting the claim.
The National Association for Home Care & Hospice (NAHC) has several concerns with the pre-claim review demonstration. CMS’ failure to take a targeted approach to the demonstration is one of those concerns. CMS could design a more manageable and meaningful demonstration by targeting agencies at risk for improper payment rather than casting a broad net over the entire state. In addition, the burden associated with a 100% pre- claim review program will be significant for agencies. Furthermore, the increased workload for both the agencies and MACs will undoubtedly result in delayed payments.
Although the pre-claim demonstration might provide agencies with an opportunity to correct technical errors prior to submitting a claim, medial review for sufficient documentation to support medical necessity and evidence of homebound has always been very subjective and inconsistently applied by the MACs. “Sufficient documentation” that CMS insists is lacking in HHAs medical records, causing high rates of denials, will remain at issue until CMS sets clear standards that all parties can understand and agree upon.
NAHC will keep its members up-to-date with any developments and the next steps we plan to take for addressing the CMS home health pre-claim review demonstration.