Home Health Medicare Pre-Claim Review: The Good, the Bad and the Ugly

The Pre-Claim Review Demonstration, a recent Medicare home health pilot program from the Centers for Medicare & Medicaid Services (CMS), is one of many new requirements that home health agencies across the country could have to adopt depending on the outcome of recent actions being taken by industry organizations, stakeholders and Congress to extend the delay or withdraw it altogether. Created to enforce a more proactive oversight strategy on Medicare home health coverage in an effort to reduce fraud and abuse, the pre-claim review’s pilot phase was to begin with implementation in Illinois, Florida and Texas in 2016, then Michigan and Massachusetts in 2017—all states with soaring fraud, abuse and over-spending rates.

But since the Illinois implementation in August, the National Association for Home Care & Hospice (NAHC) has described the demonstration as “a complete mess,” after impacts in the pilot state are reportedly “highly negative” and “rife with problems.” These adverse reports prompted Florida Senators Ben Nelson (D) and Marco Rubio (R) to push for a delay in Florida implementation—the next state set to begin the demonstration on October 1. After urging for a delayed expansion “until CMS, stakeholders and Congress have the opportunity to evaluate and understand the impact of the demonstration in Illinois,” CMS announced an indefinite delay on pre-claim review while they focus education efforts on how to submit pre-claim review requests, documentation requests, documentation requirements and common reasons for nonaffirmation.

While the next pilot states are on hold for now—CMS will announce further expansion with at least 30 days’ notice—the demonstration remains in effect in Illinois. And as NAHC and other stakeholders continue the fight to suspend Illinois’ pre-claim review mandates, many agencies in other states are worried CMS will instead resume expansion.

The Good
The intent of the demonstration is good and meant to ensure home health services are funded by Medicare only when criteria for service coverage is met. When successful, this would result in the reduction of improper payments and the cost of additional documentation and resources it takes for CMS to chase them.

According to CMS, the demonstration, “Will test improved methods for identifying, investigating and prosecuting Medicare fraud occurring in Home Health Agencies (HHAs) while maintaining or improving the quality of care provided to Medicare beneficiaries.”

Also, according to CMS, the good news is, there are no new documentation requirements with pre-claim review. HHAs are to submit the same claim supporting documentation to support the Medicare home health benefit as they do now during random post-claim review audits.

But are these changes working?

The Bad
The bad news is that claim reviews are reportedly 40 to 50 times their normal volume—resulting in Medicare Administrative Contractors (MACs) losing electronically submitted documents, incorrectly denying claims and delayed pre-claim affirmations potentially causing providers to postpone care; however, this is not CMS’s intent. CMS is very clear that pre-claim review is not a prior authorization process in that the pre-claim review occurs after the home health services have begun but prior to the final claim submission.

But these are not the only common complaints since the demonstration has gone live. Below is a list of problems that have become a shared frustration among Illinois providers.

• No reasons are given as to why some claims get approved and others get denied
• Denied claims get re-submitted and approved without any changes made
• CMS sends a letter to Medicare beneficiaries informing them of denied claims, causing confusion and fear. The letter also reflects poorly on the agencies, as beneficiaries do not understand the mandated process
• Medicare beneficiaries who opt out of home health services due to the CMS letter will likely increase hospital readmissions—resulting in poor customer satisfaction scores in value-based purchasing initiatives
• Large, publicly traded providers will likely be able to weather pre-claim review while smaller providers may not—due to non-affirmed claims slowing down cash flow
• Delays are lasting between four and seven days
• Each submission is extremely cumbersome and time-consuming
• Nonaffirmation rates of up to 80 percent have been cited

While “only about 20 of the roughly 900 agencies in Illinois have shared their data and pre-claim review experiences,” the Illinois Homecare & Hospice Council (IHHC) urges others to join the fight. But just because you want to contribute to the end of pre-claim review, does not mean you should stop participating. If providers in Illinois choose not to adopt this new pre-claim review process, final claims submitted for payment will undergo medical review and if approved, will be paid at a 25 percent reduction after a three-month grace period.

The Ugly

• The pre-claim review demonstration enforces an increased burdensome process on all Medicare fee-for-service episodes with potential monetary penalties that impact all home health providers in the demonstration states regardless of whether they are “bad actors”
• The existing post claim review audits already show that a major contributor to high claim denial rates is due to incomplete physician face-to-face and other certification documentation
• A recent CMS proposed rule issued in July is looking to address the tremendous backlog of appeals pending before administrative law judges’ (ALJ) (over 750,000 cases and rising). Under the pre-claim review demonstration program, all appeal rights remain unchanged
• CMS provided additional funding to hire more contractor staff to accommodate the increased volume of claims to be reviewed during the demonstration program

This raises the following question:

• Why should a demonstration program that is looking to fix a problem for a specific target population implement a solution that:
  • Penalizes all agencies, when data exists to target more specific populations
  • Increases the home health agency burden for submitting claim supporting documentation, but also maintains the same underlying failed documentation requirements (i.e., physician F2F clinical encounter note) and review processes that have already been proven to not work during post claim review audits
  • Enforces an audit on all home health claims with existing failed documentation requirements that risks the probability of increased ALJ appeals when the proposed rule is looking for ways to reduce them
  • Spends additional money to implement a demonstration with the same requirements that do not work during post-claim review

Are We Targeting the Wrong Problem?
As for those in the other four states hoping CMS abandons this demonstration altogether—stay positive, stay educated on the latest information, and support NAHC in their efforts to call upon Congress to oppose this chaotic program. Despite the outcome, however, it is best to be prepared and implement appropriate processes to ensure the required documentation to support Medicare HH coverage is received accurately and timely for all patients.

If you have not already, you are going to have to improve upon and streamline some processes to stay relevant in these changing times. You will need to have processes in place that ensure continuous cash flow by having tracking mechanisms for obtaining required documentation earlier, and quality review processes to ensure the documentation is comprehensive and accurate.

To ensure accurate and timely documentation (of which much can be automated), see below for suggestions:

• The tracking receipt and review of the actual F2F clinical encounter note used by the certifying physician can justify the referral and medical necessity for HH services
• Ensure HH generated records that corroborate the physician documentation have been signed, dated and incorporated into the certifying physician’s medical records
• Check tracking and review of OASIS visit documentation and Plan of Care (POC) content for accuracy and consistency
• Review tracking and receipt of the signed and dated POC from the physician
• Review tracking and receipt of the signed and dated physician’s certification of patient eligibility
• Review and verify that medical record documentation exists to satisfy Medicare’s two requirements for “Confined to Home”

Has it been thought that maybe there are other alternatives to combatting fraud and abuse?

NAHC and other industry stakeholders believe there are other alternatives and are happy to help find the right alternative solutions. Join in the fight with NAHC, Congress and other industry stakeholders by contacting your representatives and urging them to stand with the 3.5 million Americans who depend on home health services AND support the Pre-Claim Undermines Seniors’ Health (PUSH) Act.