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Medicare’s Face-to-Face Examination Rules: Home Health Trade Association Fights Back

June 12, 2014 by  
Filed under Home Health & Hospice

Medicare Face-to-Face Rules Are Complicated(June 11, 2014):  The Department of Health and Human Services (HHS) and its agency the Centers for Medicare and Medicaid Services (CMS) have suffered yet another recent blow with the June 5th filing of a lawsuit against the agency by the National Association for Home Care & Hospice (NAHC).[1]  This most recent lawsuit against CMS was filed in connection with agency’s application of the Medicare face-to-face examination rules.  As you will recall, less than two months ago, on April 14, 2014, the American Hospital Association (AHA) and several other interested parties filed a lawsuit against HHS in connection with the way that CMS has been administering the “Two Midnight” rule on inpatient admissions. Even more recently, on May 22, 2104, the AHA filed a completely separate lawsuit against HHS for the failure of the Office of Medicare Hearings and Appeals (OMHA) to comply with applicable statutory deadlines regarding the administrative review by an Administrative Law Judge (ALJ) of claims denied by Recovery Audit Contractors (RACs).  Collectively, these lawsuits reflect a growing discontent by health care providers with the way that Medicare claims are being processed and handled by HHS and its agencies.  With NAHC’s initiation of litigation over CMS’s implementation of the “Face-to-Face” rules, the dissatisfaction of home health agencies around the country with the way that their Medicare claims are being handled has now moved to the forefront of the debate on how the Medicare program is being managed by CMS.

I.  Basic Face-to-Face Examination Rules Dispute:

Under the provisions of the Affordable Care Act (ACA), a face-to-face examination between a qualified physician and a Medicare beneficiary must be conducted to ensure that a patient qualifies for home health services.[2] On June 5, 2014, NAHC filed suit against both HHS and CMS challenging the government’s implementation of overly complex face-to-face examination rules which have greatly expanded the documentation requirements which must be met in order to show that a Medicare beneficiary is homebound and is in need of skilled nursing and / or skilled therapy services. As NAHC has alleged in its lawsuit, CMS has:

“devised and administered these physician documentation requirements in a manner that renders it nearly impossible to achieve compliance as they are wholly confusing to physicians, home health agencies, and patients, leading Medicare administrative contractors to evaluate claims in a manner that is inconsistent, arbitrary, and inaccurate. (Emphasis Added).

Essentially, NAHC has argued that CMS has placed “form” over “substance,” choosing to examine whether a home health provider has adhered to complex documentation requirements rather than focus on the best interests of the Medicare beneficiaries for whom they are responsible. As a result of the agency’s actions, countless home health claims filed by agencies around the country have been denied because their face-to-face documentation has allegedly failed to meet the documentation guidelines that have been implemented by CMS.  Perhaps most importantly, home health agencies have been forced to discharge Medicare beneficiaries from services because the face-to-face documentation examined by CMS or one of its contractors does not allegedly show that a patient qualifies as “homebound.”

II. How has CMS Implemented the “Homebound” Requirements Mandated under the ACA?

When formulating the regulations intended to implement Section 6407 of the ACA, CMS set out physician documentation requirements under 42 CFR 424.22(a)(1)(v) which specifies, in part, that:

“(v) The physician responsible for performing the initial certification must document that the face-to-face patient encounter, which is related to the primary reason the patient requires home health services, has occurred no more than 90 days prior to the home health start of care date or within 30 days of the start of the home health care by including the date of the encounter, and including an explanation of why the clinical findings of such encounter support that the patient is homebound and in need of either intermittent skilled nursing services or therapy services as defined in Sec. 409.42(a) and (c) of this Chapter, respectively.”[3]

Subsection (F) further provides that:

“(F) The physician responsible for certifying the patient for home care must document the face-to-face encounter on the certification itself, or as an addendum to the certification (as described in paragraph (a)(1)(v) of this Section), that the condition for which the patient was being treated in the face-to-face patient encounter is related to the primary reason the patient requires home health services, and why the clinical findings of such encounter support that the patient is homebound and in need of either intermittent skilled nursing services or therapy services as defined in § 409.42(a) and (c) respectively. The documentation must be clearly titled and dated and the documentation must be signed by the certifying physician.”[4]

CMS subsequently published a series of instructional materials in an effort to educate both referring physicians and home health agencies on the agency’s expectations in terms of the supporting documentation which must be shown, focusing on the face-to-face encounter requirements that must be shown in order for a claim to qualify for coverage and payment.  In response to continuing questions and related concerns by home health providers around the country, in January 2014, CMS issued MLN Matters, SE 1405, titled “Documentation Requirements for Home Health Prospective Payment System (HH PPS) Face-to-Face Encounter.”

III.  The Nature of the Face-to-Face Problem:

Unfortunately, in audits conducted on behalf of CMS, various federal contractors[5] have often found that the face-to-face rules and the encounter documentation completed by physicians[6] have not been properly completed. Typically, the referring physician would fail to  include an appropriate “brief narrative statement” which describes a patient’s clinical condition, shows the patient is homebound, and reflect that the patient needs skilled nursing and/or therapy services.  As a result, payment for these home health claims has been denied.

As the NAHC lawsuit reflects, CMS has prohibited home health agencies (and their staff) from composing or assisting a referring physician in completing the narrative statement that is required when completing a written face-to-face evaluation. This difficult situation is further complicated by the fact that referring physicians are not held accountable by CMS if they fail to properly document a face-to-face encounter with a patient who is being referred for home health services.  Ultimately, if a face-to-face encounter is determined to be insufficiently documented, payment is withheld or recouped from the home health agency, not the referring physician responsible for fully and accurately documenting the face-to-face encounter.

NAHC has further argued that requiring a physician to complete a narrative summary in support of a patient’s homebound status, which also shows a patient’s need for skilled nursing or therapy care, is beyond what has been authorized by the statute.  As you will recall, under   Section 6407 of ACA (as codified at 42 USC 1395f(a)(2)(C) and 42 USC 1395n(a)(2)(C)) merely provides that a physician must document that a face to face encounter with the home health care patient was conducted.  The statutory requirements passed under the ACA do not require that a brief summary narrative must be completed. Nevertheless, when drafting and implementing relevant regulations, CMS included requirements under 42 CFR 20 424.22(a)(1)(v) which mandate that a physician include a narrative or other documentation that shows why the patient’s clinical condition supports that the patient is homebound and needs skilled nursing or therapy services.

As a final point, NAHC has alleged that HHS and CMS have violated the due process rights of its member home health agencies through the issuance of “unclear and ambiguous implementing guidance on physician documentation.”

IV.  Relief sought by NAHC:

As relief, NAHC has asked that HHS and CMS be enjoined from requiring the current face-to-face examination documentation which goes beyond what is called for under the ACA.  NAHC is also asking that CMS draft and issue reasonable face-to-face documentation requirements which allow  agencies acting in good faith to be paid for the home health services being provided.

NAHC has also asked that retroactive reviews of summary narratives be suspended until the face-to-face examination rules can be clarified and / or revised.

V.  Recommendations:

While we wholly support the NAHC’s efforts and hope that they prevail in this litigation, it is important for home health agencies to keep in mind that this will likely be a tough case.  There are numerous precedent-setting cases that have been litigated over the years which have found that administrative agencies are to be given a wide degree of discretion when it comes to crafting of implementing regulations and how those regulations are to be interpreted.  As a result, we strongly recommend that home health agencies endeavor to meet the regulations as they are currently in place.

If your home health agency has not already done so, it is imperative that you implement an effective Compliance Plan which formally incorporates the agency’s heightened requirements for qualifying as a compliant face-to-face encounter. Your home health agency should also implement a vigorous internal audit program which reviews each and every face-to-face encounter form prior to submitting a claim for payment.

Healthcare LawyerRobert W. Liles, Esq., serves as Managing Partner at Liles Parker, Attorneys & Counselors at Law.  Liles Parker attorneys represent health care providers and suppliers around the country in connection with Medicare audits by ZPICs and other CMS program integrity contractors.  The firm also represents health care providers in HIPAA Omnibus Rule risk assessments, privacy breach matters, State Medical Board inquiries and regulatory compliance reviews. Call for a free consultation:  1 (800) 475-1906


[1] The primary plaintiff in this case, NAHC represents the interests of approximately 6,000 home health agencies around the country.
[2] Section 6407 of the ACA amended 42 U.S.C.§1395f(a)(2)(C), requiring that:
”[I]n the case of a certification made by a physician after January 1, 2011, prior to making such certification the physician must document that the physician himself or herself, or a nurse practitioner or clinical nurse specialist (as those terms are defined in Section 1861(aa)(5)) who is working in collaboration with the physician in accordance with State law, or a certified nurse-midwife (as defined in Section 1861(gg) as authorized by State law, or a physician assistant (as defined in Section 1861(aa)(5)) under the supervision of a physician, has had a face-to-face encounter (including through use of telehealth, subject to the requirements in section 1834(m), and other than with respect to encounters that are incident to services involved) with the individual within a reasonable timeframe as determined by the Secretary. . . ’’ The enactment of the ACA also resulted in a similar amendment, governing home health benefits.  This amendment to 42 U.S.C. 1395n(a)(2)(C) required that:“[I]n the case of a certification after January 1, 2010, prior to making such certification the physician must document that the physician, or a nurse practitioner or clinical nurse specialist (as those terms are defined in section 1861(aa)(5)) who is working in collaboration with the physician in accordance with State law, or a certified nurse-midwife (as defined in Section 1861(gg)) as authorized by State law, or a physician assistant (as defined in Section 1861(aa)(5)) under the supervision of a physician, has had a face-to-face encounter (including through use of telehealth and other than with respect to encounters that are incident to services involved) with the individual during the 6-month period preceding such certification, or other reasonable timeframe as determined by the Secretary. . .’.
[3] A complete rendition of this rule can be found at: http://www.gpo.gov/fdsys/pkg/CFR-2013-title42-vol3/xml/CFR-2013-title42-vol3-sec424-22.xml.
[4] Ibid.
[5] These private organizations include Medicare Administrative Contractors (MACs), Zone Program Integrity Contractors (ZPICs), and other private contractors engaged by the agency to review and audit home health claims to ensure that the services meet the agency’s documentation requirements.
[6] Under 42 CFR 424.22(a)(1)(v), a referring physician may conduct the face-to-face encounter and document it within 30 days of the patient’s admission to home health care.
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