NAHC Submits Comments to OMB on CMS’s Proposed Pre-Claim Review Demonstration for Home Health Services
July 23, 2016 08:54 AM
The National Association for Home Care & Hospice (NAHC) recently submitted comments to the Office of Management and Budget (OMB) regarding the proposal from the Centers for Medicare & Medicaid Services (CMS) to institute a system of “pre-claim review” on all home health services in five states. Those states are Illinois, Florida, Michigan, Texas, and Massachusetts. Illinois is up first on August 1.
In its comments to OMB, NAHC states that the proposed program “falls short of what it takes to be an effective program integrity tool sufficient to offset the down-side risks to Medicare beneficiaries and upstanding home health agencies,” and recommends that the proposal be withdrawn.
NAHC argues that the downside consequences include the fact that the proposed program:
is not sufficiently targeted to the fraud or abuse of concern
is not evidence-based with demonstrated return on investment
does not prevent fraud
is absent adequate legal authority
erects barriers to appropriate care access
would be excessively burdensome
fails to distinguish between fraud and unintentional noncompliance and would be highly likely to lead to a significant number of “innocent victims” through care delays, extended stays in high risk settings and wrongful rejections of authorization
The proposed program “violates standards of reasonableness, economy, and efficiency,” NAHC states. “The proposal is untargeted, with high administrative costs and operational burdens, is likely to create improper barriers to access to timely care, would not be effective against the fraud concerns in Medicare home health services, and would not aid in achieving a higher degree of compliance with the alleged claim documentation deficiencies.”
NAHC further states “there is no legal authority for the proposed pre-claim review demonstration program.” 42 USC Section 1395b-1(a)(1)(J) provides limited and qualified authority to CMS “to develop and engage in experiments and demonstration projects” in order “to develop or demonstrate improved methods of investigation and prosecution of fraud.” NAHC states that the proposal “does not comply with the congressionally expressed authority for a demonstration program of this nature.”
In fact, NAHC states, the “Supporting Statement” accompanying the pre-claim review Paperwork Reduction Act notice did not even attempt to define the nature of the fraud that the project would address. Instead the program claims to tackle improper payments with reference to the 2014 Comprehensive Error Rate Testing (CERT) results that report an improper payment rate of 51.4% compared to the FY 2013 report of 17.3%. However, NAHC notes that FY 2014 was the year in which CMS expanded its claims reviews for compliance with the physician face-to-face encounter requirements, which led to an upsurge in claims denials. “However, those denials, like the CERT results, were due to allegations of insufficient documentation, not fraud. The Supporting Statement verifies such in noting that 90% of the CERT reported errors were from ‘Insufficient Documentation.’” NAHC further notes that the proposed program would “focus only on garden-variety disputes on claim documentation while not operating to address the now-rescinded face-to-face encounter documentation issues at the center of the CERT results.
Further questioning the legal authority of the proposed program, NAHC notes that Congress has limited the use of prior authorization to certain items of Durable Medical Equipment (DME), and that any proposal to implement a pre-claim review system must be promulgated through formal rulemaking.
NAHC challenges the CMS estimate of costs for the project and emphasizes that CMS has not demonstrated that it would be worth the expense. CMS estimates that the costs to Medicare would be nearly $300 million over three years. NAHC explains that the estimate is based on the original “prior authorization” proposal where 908,000 claims reviews would be required. With the current project, those reviews could triple since CMS allows providers to request a pre-claim review multiple times. That increased volume could bring Medicare costs exceeding $1 billion.
In addition, NAHC disputes CMS’s estimate of 30 minutes of clerical time for home health agencies. Instead, NAHC survey data shows a 1-2 hour time expense with both clinical professionals and clerical staff involved, creating a cost estimate of over $100 per claim review.
“Overall, the proposed collection activity is based on a demonstration project plan that is not authorized under Medicare and is implemented in a manner wholly inconsistent with Medicare law, the Administrative Procedures Act (APA), and the Small Business Regulatory Flexibility Act,” NAHC states. “Further, the underlying project significantly increases Medicare costs and the paperwork cost burdens for home health agencies without a justifiable return on that cost. Medicare has numerous alternative actions that can be taken that do not impose the level of burden as presented with this project with equal of better outcomes for Medicare and program stakeholders.”
For these reason, NAHC “respectfully recommends that OMB instruct CMS to withdraw its proposal for prior authorization in home health services.”
To read NAHC’s full comments, click here.