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What Home Health Agencies Need to Know as Federal Government Restarts Burdensome Pre-Claim Review, Offering ‘Choice' of Punishment

    Client Alerts
  • June 19, 2018

Shortly after Memorial Day 2018, the federal government announced its plan to bring back a payment review project that puts significant administrative burdens on home health agencies. Originally called the Pre-Claim Review Demonstration for Home Health Services, the project has been rebranded as the Review Choice Demonstration for Home Health Services. The original project’s rollout in Illinois resulted in extensive issues, reported delays in access to care, and even some home health agencies going out of business.

The problems were bad enough that the Centers for Medicare & Medicaid Services (CMS) put the project on hold in April 2017. But now, CMS says it has revised the project “to incorporate more flexibility and choice for providers,” and the government is planning another rollout attempt. This time, CMS has also changed some of the targeted states. Originally, the project intended to cover Illinois, Florida, Texas, Michigan, and Massachusetts. Now, CMS has announced that it will substitute North Carolina and Ohio for Michigan and Massachusetts. CMS has not provided any detail on why it chose these states or why it is making the changes. One thing that the five new states have in common is that they share the same Medicare Administrative Contractor – Palmetto GBA.

Here’s how the reworked demonstration will work: Instead of the way almost all health care services are paid for – provide the service, submit a bill, and then get paid – the review project, if implemented, will require home health agencies to pick their poison.  They can “choose” the prepayment review route where the agency will submit all documentation before CMS will decide whether to pay a claim for Medicare services.  Alternatively, a provider can “choose” to subject all of its claims to postpayment review. Finally, a provider could theoretically choose to accept a 25 percent reduction in its payment and avoid the 100 percent prepayment review or postpayment review. Of course, even with the reduction, its paid claims will still be subject to postpayment review. According to CMS, the idea is to help with “the prevention and identification of potential fraud, waste, and abuse; the protection of Medicare Trust Funds from improper payments; and the reduction of Medicare appeals.”

The prepayment and postpayment review concepts are nothing new and can make sense when used in a targeted, thoughtful manner. However, in this project, CMS plans to apply these reviews across the board to every single claim submitted by every single home health agency in the rollout states. Complying with that mandate will be arduous for the contractors reviewing the documentation, the providers rendering the services, and the Medicare beneficiaries.

Some home health agencies have said it takes them over an hour to submit one claim – and they can have hundreds of claims to submit each day. In other words, the only way to comply is to hire additional staff or outside vendors to handle the additional burden. But CMS has not increased reimbursement rates to help pay for that.

Importantly, CMS is accepting public comment on the plan until July 30. Hopefully, it will heed input from provider and beneficiary groups alike about the pitfalls of this across-the-board review approach. It does not appear, however, that CMS has factored any of the actual experiences and problems in Illinois into the new program.

To help providers prepare, the Association for Home & Hospice Care of North Carolina is hosting a webinar on Wednesday, June 27. The webinar will put actual, redacted documentation “on trial,” and I will serve as the pre-claim review auditor. You can learn more and register for the webinar here.

For more information, please contact me or your regular Parker Poe contact.