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OIG Has Identified Common Errors by High-Risk Home Health Agencies.  Does Your Home Health Agency Have These Documentation Problems?

September 30, 2019 by  
Filed under Home Health & Hospice

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(September 30, 2019):  On September 5, 2019, the Department of Health & Human Services (HHS), Office of Inspector General (OIG) published an HHS-OIG Data Brief entitled “The Centers for Medicare & Medicaid Services Could Use Comprehensive Error Rate Testing Data To Identify High-Risk Home Health Agencies.”[1]  The purpose of OIG’s review was two-fold:  First, OIG examined the results of “high-risk” home health claims reviews conducted by Comprehensive Error Rate Testing (CERT) contractors during the Fiscal Years (FY) 2014 through 2017 and identified the most common types of errors that resulted in claims denials.  Second, OIG wanted to identify factors that can be used to more readily identify high-risk home health agencies, reduce improper payments and ultimately reduce the home health CERT error rate. The purpose of this article is to examine the common types of home health claims errors identified by CERT contractors and discuss steps that your agency should take when responding to a CERT audit request.

I.  Overview of the CERT Audit Program:

In 1996, the OIG first measured the improper payment rate for traditional Medicare, Fee-for-Service (FFS) claims on a nationwide basis.  The OIG continued to estimate the Medicare FFS improper error rate until 2002.  In 2003, the Centers for Medicare & Medicaid Services (CMS) took over responsibility for handling these measurements.  To do so, CMS implemented the Comprehensive Error Rate Testing (CERT) program.

The CERT program was designed to measure improper payments made under the Medicare FFS program and comply with the Improper Payments Information Act (IPIA).[2] What is considered to be an improper claim?  CERT contractors are specifically tasked with the review of a sample of Part A and Part B claims that have been paid by a Medicare Administrative Contractor (MAC) or a Durable Medical Equipment (DME) MAC.

After pulling a sample of paid Medicare FFS claims, the CERT contractor will then contact the responsible health care provider or supplier and request a copy of the medical documentation associated with the claim at issue.  Upon receipt, the CERT contractor will then audit the claim to determine whether it was correctly paid by the responsible MAC or DME MAC. If the MAC or DME MAC should have denied a claim or paid the claim at a different amount, the claim is considered to be an improper payment.  Each year, CERT contractors review approximately 50,000 Medicare FFS claims.  Based on their findings, a national improper payment rate is calculated.

II.  CERT Audits of Home Health Medicare Claims:

During the period FY 2014 through FY 2017, CERT auditors found that improper payment rates of Medicare FFS claims paid to home health agencies has significantly decreased, from 51% error rate in FY 2014 to 32% error rate in FY 2017.

Estimates of Improper Home Health Agency Payments as Reported by Comprehensive Error Rate TestingOIG Analysis of CERT Audits

III.  The OIG Analysis of CERT Home Health Error Data:

Despite the fact that significant progress by home health agencies has been made, CERT auditors calculated that as of FY 2017, approximately 32% of the Medicare FFS payments made to home health agencies were improper. This error rate is more than three times higher than the overall national improper payment rate of 9.51%.[3]

With the CERT contractor’s findings in mind, the OIG conducted an analysis of the CERT audit results in an effort to identify “high-risk HHAs with high rates of improper payments as well as the common types of errors that caused improperly paid claims.” [4]

As the OIG report notes, there is no definitive list of high-risk HHAs. Therefore, the OIG assembled a list of home health agencies that have had three or more improperly paid claims (as identified by CERT auditors) during the period FY 2014 through FY 2017.

IV.  What Were the OIG’s Findings with Respect to High-Risk Home Health Agencies?

Upon review of the CERT audit findings, the OIG estimated that from FY 2014 through FY 2017, more than $4 billion was paid to high-risk home health agencies.  More significantly, OIG estimates that during this same period, 78% of the CERT-reviewed payments made to high-risk home health agencies were improper.  As the chart below reflects, from FY 2014 to FY 2017, the improper error rate of high-risk home health agencies declined from a high of 81.2% to a low of 72.0%.  Nevertheless, it is important to remember that the error rate for high-risk home health agencies remains more than twice the overall error rate for all home health agencies.

The 87 High-Risk Home Health Agencies’ Error Rate Compared With the Home Health Agency National Error Rate

OIG Analysis of CERT Audits

V.  Primary Claims Errors of High-Risk Home Health Agencies:

Overall, OIG found that more than 90% of the CERT audit denials of high-risk home health agencies were based on “insufficient documentation.”  The primary documentation errors noted included the following:

    • 49% of Face-to-Face Evaluations Did Not Meet Medicare Documentation Guidelines. As Palmetto GBA (the MAC for Texas-based home health agencies) has noted, the most common face-to-face documentation deficiencies identified by CERT auditors included the fact that (1) the documentation was insufficient to show that the physician-patient encounter was related to the primary reason for home care, (2) the documentation was insufficient to show how the patient’s condition supports the patient’s homebound status, and / or (3) the documentation was insufficient to show how a patient’s condition supports the need for skilled services.
    • 16% of Physician Certification and Recertification Requirements Have Not be Properly Documented. Under 42 CFR 424.22(a)(1), a physician must certify that a patient is eligible for Medicare home health services.  The contents of a proper certification must reflect that (1) the individual needs or needed intermittent skilled nursing care or physical therapy or speech-language pathology services, (2) the individual is confined to the home except when receiving outpatient services, (3) a plan for furnishing services has been established and will be or was periodically reviewed by an eligible physician, (4) a face-to-face patient encounter, related to the primary reason the patient requires home health services, occurred no more than 90 days prior to the home health start of care or within 30 days of the start of care.  Additionally, the face-to-face encounter must be conducted by a physician, nurse practitioner, certified nurse specialist, certified nurse midwife or a physician assistant (as described in 42 CFR 424.22(a)(1)(v)(A) through (B)).

Additional documentation errors included:

  • 9% of Orders were improperly documented or were missing.
  • 9% of Outcome and Assessment Information was not in the OASIS repository or the patient’s medical records.
  • 5% of Plans of Care were not properly documented or were missing.
  • 4% of Progress Notes were not fully documented to support a billed date of service by specific specialists or were missing.
  • 8% Other documentation deficiencies.

VI.  Comments from CMS:

Although CMS acknowledged that home health claims remain problematic, the agency took issue with the OIG’s findings. As the agency wrote:

CMS does not believe this methodology for identifying error-prone HHAs is valid. The CERT program calculates the improper payment rate for the entire Medicare Fee-for-Service program by evaluating a statistically valid stratified random sample of claims to determine if they were paid properly under Medicare coverage, coding, and billing rules. . . However, the service-type improper payment rates do not have similar precision requirements and therefore CERT data is not precise at the provider level.”  (emphasis added).

Regardless of whether you side with the OIG or with CMS, there is no dispute that overall, home health agency documentation remains incomplete and / or missing 32.2% of the time.  Unfortunately, home health agencies in Ohio, Illinois, Texas, North Carolina and Florida (Review Choice Demonstration Project states), are especially vulnerable as the project ramps up in these states.

VII.  Recommendations for Home Health Agencies:

Home health agencies around the country remain under the microscope.  Agency claims are being subjected to Target, Probe & Educate (TPE) audits, Additional Documentation Requests (ADRs), Prepayment Review and Postpayment Audit.  Implementation of the Review Choice Demonstration Project in the five states above further adds to the significant audit risks already faced by home health agencies in these states.

Now, more than ever before, it is imperative that home health agencies conduct periodic internal reviews of their documentation practices to ensure that they are meeting the myriad requirements that have been established by CMS in order for home health claims to qualify for coverage and payment.   Moreover, it is important to keep in mind that there are multiple government contractors that may audit your home health agency at any time.  The following chart provides an overview of the current home health audit landscape.

OIG Analysis of CERT Audits

As a participating provider in the Medicare program, a home health agency is required to have an effective Compliance Program in place.  One of the seven elements of your Compliance Program includes “Monitoring, Auditing and Internal Reporting Systems.”  If you have not already done so, your home health agency needs to periodically conduct internal audits and reviews to better ensure that physicians, nurse practitioners, therapists and staff are properly documenting their services in a compliant fashion.

Robert W. Liles Healthcare AttorneyLiles Parker attorneys have extensive experience representing home health agencies around the country in connection with claims audits by OIG, UPICs, MACs and other CMS contractors.  Notably, many of our health lawyers are also Certified Professional Coders (CPCs) and / or Certified Medical Reimbursement Specialists (CMRSs).  Give us a call if your home health agency is audited, WE CAN HELP. Questions?  Give us a call.  For a free consultation, we can be reached at:  1 (800) 475-1906.


[1] Department of Health & Human Services, Office of the Inspector General, HHS OIG Data Brief, A-05-17-00035, entitled “The Centers for Medicare & Medicaid Services Could Use Comprehensive Error Rate Testing Data to Identify High-Risk Home Health Agencies.”  (August 2019).

[2] The IPIA was later amended by the Improper Payments Elimination and Recovery Act (IPERA) of 2010 and the Improper Payments Elimination and Recovery Improvement Act (IPERIA) of 2012.

[3] See

[4] Data Brief:  Analysis of Home Health CERT Data (A-05-17-00035).  Page 3.

CMS has Ended its Moratorium on New Home Health Agencies in Texas, Illinois, Michigan and Florida. Unfortunately, the Lifting of the Moratorium Isn’t Necessarily a Good Thing for Existing Home Health Agencies.

February 19, 2019 by  
Filed under Home Health & Hospice

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Review Choice Demonstration Project(February 19, 2019):  CMS has now ended, at least for the current time, the moratorium that it placed on the approval of new home health agencies.  At the same time, home health providers that operate in Illinois, Ohio, North Carolina, Florida and Texas, and potentially other states within the Palmetto/JM jurisdiction (Alabama, Arkansas, Georgia, Indiana, Kentucky, Louisiana, Mississippi, New Mexico, Oklahoma, South Carolina, and Tennessee) face the likelihood that a revised pre-payment demonstration model will be implemented in the near future.

I.  Lifting of the Moratorium:

Effective January 30, 2019, CMS has officially ended the “temporary” moratorium on new home health agencies, sub-units and branch locations (collectively referred to as “HHAs,” “home health agencies,” or “agencies”) in Illinois, Michigan, Texas and Florida.[1]  This means that there is no longer in effect a federal prohibition on enrolling new home health agencies in the Medicare program in these or any other states, and that agencies in these states that wish to enroll in Medicare can now begin the process of doing so.

II.  Background of the Home Health Agency Moratorium:

CMS initially imposed a temporary moratorium to prevent the enrollment of new home health agencies in Miami-Dade County, Florida and Cook County, Illinois and surrounding counties in 2013.  CMS then extended the existing moratoria and expanded them to cover Broward County, Florida, Dallas and Harris Counties, Texas, Wayne County, Michigan and surrounding counties.  Finally, in August 2016, CMS extended and expanded the moratoria on new HHA’s to Florida, Illinois, Michigan and Texas, and further extended those moratoria through January 2019.  CMS has justified the imposition of the moratoria and selection of the geographic areas based on its view that those areas were especially at high risk for fraud, waste, and abuse.  Finally, CMS lifted the moratorium on home health agencies in these states effective January 30.

III.  What is the Anticipated Impact of Lifting the Moratorium?

As noted, above, this means that providers that wish to enroll new home health agencies in Medicare in these states may now begin that process.  However, experience has demonstrated that CMS is not reticent to take these, and other, actions when the agency believes that there is a high risk of fraud and abuse in particular localities.  Additionally, federal law and regulations require states to impose temporary moratoria on enrollment in the Medicaid and CHIP programs except in certain circumstances in areas and over time periods where Medicare takes these actions.  Finally, this relief affects only CMS approval.  It does not eliminate the need to check and comply with any restrictions that state or local governments may place on the establishment of new agencies.  Thus, as always, we continue to recommend to all home health agency providers that they establish and maintain strong compliance programs to alleviate the perceived need of moratoria in the future, and also to minimize the likelihood that their agencies will be the subject of investigation or sanctions.

IV.  CMS’s Review Choice Demonstration Project:

CMS’s Review Choice Demonstration Project is an outgrowth of the what was called the Pre-Claim Review Demonstration Project.  In August 2016, CMS initiated the Pre-Claim Review Demonstration Project for Illinois home health agencies under which these agencies were required to submit all of their Medicare claims and documentation for a pre-claim review prior to submitting them for payment.  It was only after the claim was “affirmed” that the agency could submit it for payment.

Initially, according to CMS, there was a wide variation of affirmation rates among agencies.  However, according to CMS, by the end of the first six-month period, agencies had on the average much higher affirmation rates.  The demonstration project was paused in April 2017 and has not been re-instituted or expanded past Illinois.

In light of the various problems encountered when implementing the Pre-Claim Review Demonstration Project, CMS has chosen not to re-initiate the program.  Instead, CMS revised its approach and announced that a new initiative, the Review Choice Demonstration Project was being implemented.  Once it goes “live” in a state, the Review Choice Demonstration Project will be in effect for five years.  As noted above, the Review Choice Demonstration Project is scheduled to cover services provided in Illinois, Ohio, North Carolina, Florida, and Texas, with the option to expand it to other states under Palmetto’s jurisdiction.

The Review Choice Demonstration Project was initially scheduled to be implemented in December in Illinois, with a rollout in other states to follow with a 60-day advance notice. However, the Illinois rollout has been delayed awaiting approval under the Paperwork Reduction Act, after which the agency will announce the start date for the demonstration in Illinois.

Under the Review Choice Demonstration Project, agencies will have their choice of three options for the first six-month period: (1) 100% Pre-Claim Review; (2) 100% Post-Payment Review; or (3) Minimal review with an automatic 25% payment reduction.

V.  Initial Options Under the Review Choice Demonstration Project:

Under the Review Choice Demonstration Project, a home health agency will have the option of choosing among three alternatives with respect to how its claims will be handled.  These three alternatives include the following:

  • Option #1: 100% Pre-claim Review

Under the first option, a home health agency will submit the pre-claim with all relevant documentation.  If the pre-claim receives an affirmation notice, the agency can submit the claim and will receive full payment, and absent evidence of possible fraud or gaming, the claim will not be subject to post-payment review by the MAC, RAC or Supplemental Medical Review Contractor.  If a pre-claim receives a non-affirmative decision, it can be submitted again for pre-claim review with additional documentation or explanation. If a claim is submitted with a non-affirmative pre-claim decision, it will be denied with full appeal rights.   Claims submitted without receiving a pre-claim determination will be subject to prepayment review and even if determined to be payable, will be subject to a 25% reduction in payment rate.

After six months, the agency will have its affirmation rate calculated.  If it has submitted at least 10 claims and if it obtains at least a 90 % affirmation rate, the agency will be allowed to continue in this option or to choose between two other options, described, below.  If the agency’s affirmation rate for the six-month period was lower than 90% or it did not submit 10 claims during that period, it must choose between one of the three initial options.

  • Option #2: 100% Post-Payment Review

Under this option, the agency will be paid in the normal course, but will have all of its claims during a six-month period undergo complex medical review.  Subsequent to the review, the MAC will recover for any claims that it has paid during this period that it finds not to meet Medicare requirements, and the agency may appeal the decision through the normal appeals process.  If the agency has obtained at least a 90% approval rate during the six-month period, it will be able to choose either option one or one of the additional two options discussed, below.  Otherwise, it will have the option of choosing one of the initial three options for the next six-month period.

  • Option #3: Minimal Review with 25% Payment Reduction

An agency that chooses this option will have its claims reviewed under the normal process, but the payment amount will have an automatic 25% reduction.  Claims will not be subject to post-payment MAC reviews but will be subject to RAC and UPIC review under the normal review process, and any denied claims will be subject to the normal appeal process.  The 25% reduction in payment amount, however, is neither transferable to the beneficiary nor subject to appeal.  Any agency that chooses this option will not be able to change options for later periods and will remain under this option for the entire five-year “demonstration.”

VI.  Subsequent Options Under the Review Choice Demonstration Project:

An agency that has selected either Option 1 or 2, above and that has an affirmation rate of at least 90% in the prior six-month period may choose either Option 1, above – 100% Prepayment Review, or one of the two options, below – Options 4 (selective post-payment review) or 5 (spot check review).

  • Option #4: Selective Post-Payment Review

Under Option #4, the agency will be paid under normal claim processing procedures.  However, the MAC will select “a statistically valid random sample” every six months for complex review.  An agency selecting this option at any time will not be able to change options at a later point in time.

  • Option #5: Spot-Check Review

Under Option #5, the MAC will select 5% of claims to be subject to pre-payment review every six months.  The agency is able to remain in this option for the remainder of the demonstration provided that “the spot check shows that the agency is compliant with Medicare coverage rules and policy.”  If the agency fails to meet that standard, it will then be required to choose between the first three options for the next six-month period.

VII.   Recommendations:

For those agencies in one of the states selected for the demonstration, the selection of an option – whether initial or subsequent – will require some thought and analysis.  For example, Option 1 could well affect agency’s cash flow depending upon its ability to submit quickly the necessary documentation in a manner that clearly demonstrates coverage.  While CMS has suggested that the MAC will make every effort to review and make pre-claim determinations within 10 days of the first submission and within 20 days of subsequent submissions for the same claims, the continued ability of the MAC to meet these time frames will also have an impact upon cash flow.

In contrast, Option #2 will subject the agency to complex review of every claim that it submits and as those agencies that have been through the appeals process understand, the backlog of appeals has caused a substantial delay in resolution no matter how worthy the appeal on its merits.  Thus, unlike the pre-claim review process, the agency may not have the opportunity to correct its documentation and correct errors for a substantial period.

Option #3 guarantees a 25% payment reduction for all claims, while Option #4 will result in the selection of what the government may argue is a statistically valid random sample for purposes of any subsequent denials.

Under these circumstances, several things are clear.  Now more than ever, agencies in these states must have procedures in place to properly document coverage for all cases that they handle, and also a form and process to be able to support coverage and simplify the process for the MAC to come to that determination quickly and without the need for appeal or multiple submissions, depending upon the option chosen.

Liles Parker attorneys have substantial experience in working with agencies in the enrollment process for Medicare certification.  Additionally, a number of our attorneys are also certified coders and have substantial experience in developing a format to justify coverage of claims.

Michael Cook Healthcare AttorneyAny person wishing a free consultation in either area should contact the author and Co-chair of our Health Care Group, Michael Cook.  Michael can be reached at (202) 298-8750 or





Home Health Pre-Claim Reviews Are Here!

August 23, 2016 by  
Filed under Home Health & Hospice

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Pre-Claim Reviews(August 23, 2016):  The home health pre-claim review demonstration project has now started and will be in place for at least the next three years. How did we get to this point?  Unfortunately, this demonstration project was initiated (in large part) based on the fact that  improper payment rate for home health claims has gone 17.3 % in FY 2013  to 51.38% in FY 2014 and 58.95% in FY 2015.

The Center for Medicare and Medicaid Services (CMS) has primarily attributed this increase due to the failure of home health agencies (and their referring physicians) to fully meet documentation requirements to support the medical necessity of the services.

I. Background:

Section 402(a)(1)(J) of the Social Security Amendments of 1967[1] authorizes the Secretary for the Department of Health and Human Services (HHS) to develop demonstration projects that “develop or demonstrate improved methods for the investigation and prosecution of fraud in the provision of care or services under the health programs established by the Social Security Act.”  Consistent with this authority, on February 5, 2016, the Centers for Medicare and Medicaid Services (CMS) published notice in the Federal Register that it intended to collect information that would be used by the agency to serve as a baseline estimate of probable fraud in payments for home health care services in the fee-for-service Medicare program.”  This baseline is to be comprised of information gathered from home health agencies, referring physicians and Medicare beneficiaries.

On June 8, 2016, CMS announced in the Federal Register (81 Fed. Reg. 37598) that five states would be part of the new Pre-Claim Review Demonstration project. For these states, preapproval is being required before final home health claims can be submitted.

  • Illinois (originally set to begin August 1, 2016)
  • Florida (no later than October 1, 2016).
  • Texas (no later than December 1, 2016).
  • Michigan (no later than January 1, 2016).
  • Massachusetts (no later than January 1, 2016).

II. What is CMS Telling Medicare Beneficiaries About the Pre-Claim Review Project?

CMS has notified beneficiaries by mail that a “new Pre-Claim Review Demonstration for Home Health Services” was to be initiated in Illinois on August 1, 2016.  (It was ultimately delayed until August 5, 2016). The letter sent to beneficiaries states that “This new demonstration doesn’t change your Medicare home health benefit and coverage requirements.”  CMS further outlines coverage requirements in its attached Fact Sheet, saying that a beneficiary must:

  • Be confined to the home at the time of services. Medicare considers you confined to the home (i.e., “homebound”) if:

(1) There exist a normal inability to leave the home, and

(2) Leaving home requires a considerable and taxing effort.

  • Additionally, one of the following must also be true:

(1) Because of illness or injury, you need the aid of supportive devices (such as a crutch, cane, wheelchair, or walker); the use of special transportation; or the assistance of another person in order to leave your home; or

(2) You have a condition such that leaving your home is medically contraindicated.

  • Be under the care of a physician;
  • Receive services under a plan of care established and periodically reviewed by a physician;
  • Need skilled services, which are services that only a skilled nurse or therapist can safely and effectively provide;
  • Have a face-to-face encounter (or visit) with a doctor or practitioner no more than 90 days before you start home health care or within 30 days after you start home health,

III. What is Palmetto GBA Telling Certifying Physicians and Practitioners?

By letter dated August 11, 2016, Palmetto GBA advised Illinois “Certifying Physician[s] / Practitioner[s]” patients that the Illinois Pre-Claim Review demonstration project for home health services began on August 1, 2016.   Palmetto GBA’s letter to certifying providers further stated that:

“As the certifying physician/practitioner, you are required under the Medicare program to supply the HHA or beneficiary face-to-face encounter visit notes as well as any other documentation that supports medical necessity for the home health care services ordered.”

Palmetto GBA’s letter further notes that to qualify for the Medicare home health care benefit, the patient must:

  • Be confined to the home;
  • Be under the care of a physician;
  • Be receiving services under a plan of care established and periodically reviewed by a physician;
  • Be in need of skilled nursing care on an intermittent basis or physical therapy or speech-language pathology; or have a continuing need for occupational therapy;
  • Have a face-to-face encounter with a medical provider as mandated by the Affordable Care Act for the initial episode of care.

Palmetto GBA’s letter to certifying providers concludes by stating that:

“What You Need to Know

. . . As the certifying physician/practitioner,  you are required under the Medicare program to supply the HHA or beneficiary face-to-face encounter visit notes as well as any other documentation that supports medical necessity for the home health care services ordered.”

Palmetto GBA’s letter concludes by noting: 

“Your Responsibility

If you are the certifying physician/practitioner for a Medicare patient, and plan to  order/refer home health care services, it is imperative that patient medical records include comprehensive clinical assessment data and are submitted to the HHA in a timely manner. Please watch this video on Home Health Face-to-Face  Documentation on Palmetto GBA’s website at”

IV. Is Participation in the Pre-Claim Review Project Really Voluntary?

Both CMS and Palmetto GBA state that the demonstration project is “voluntary.”  Is it really voluntaryAs Palmetto GBA’s own website acknowledges:

“Final claims submitted without a Pre-Claim Review request during the first three months of the demonstration from the start date in that state will not be subject to a payment reduction.”

After this three month period:

“If a Home Health Agency in a demonstration state does not submit a Pre-Claim Review request, the final claim will be subject to pre-payment review. . . If no Pre-Claim Review request was submitted and the claim is determined  through pre-payment medical review to be payable, it will be paid with a 25 percent reduction of the full claim amount. . . The 25 percent payment reduction is non-transferable to the beneficiary. . . The 25 percent payment reduction is not subject to appeal.“  (emphasis added).

V. How Will a “Request for Anticipated Payment” (RAP) be Handled?

RAPs are not subject to the Pre-Claim Review process. At this time, no changes in the RAP submission process is anticipated – RAPs should be submitted in the normal process — there will not be any changes in the process and payment of a RAP.  A home health agency must submit a final claim within 120 days of the start of the episode OR 60 days after the paid date of the RAP. Please keep in mind, if a final claim has not been submitted in a timely fashion, the RAP will continue to be automatically cancelled.

VI. How Will a “Low Utilization Payment Adjustment” (LUPA) be Handled?

Home health services for less than 60days will still be subject to Pre-Claim Review, with the following exception:

  • LUPAs occur when four or fewer visits are provided in a 60 day episode. LUPAs are not subject to the Pre-Claim Review process.

VII. How Should Services With Modifier GY be Handled?

Home health services that are not covered by Medicare should be appended with a GY Modifier.  This modifier reflects the fact that the item or service does not meet the definition of a Medicare covered benefit.  Home health services billed with a GY Modifier are not subject to Pre-Claim Review.

VIII. How Should Services With Modifier GA be Handled?

Use of a GA Modifier indicates that that a provider expects an item or service to be denied because it is not reasonable and necessary.  The most common example of this situation would be for home health services that do not appear to meet the requirements under the applicable LCD.   It is appropriate to report this modifier when a beneficiary refuses to sign an ABN.  Importantly, the presence or absence of the GA Modifier does not influence Medicare’s determination for payment.  Therefore, Pre-Claim Review IS STILL REQUIRED for home health services billed with a GA Modifier.

IX. When Will Home Health Services in Texas be Subject to Pre-Claim Review?

Unless delayed (as it was for a few days in Illinois), the Pre-Claim Review process is currently scheduled to apply to all 60-day episodes of care that BEGIN on or after December 1, 2016.  This will include:

  • Initial certifications of care.
  • Recertifications of care. If a beneficiary is discharged and readmitted to the same agency within the same 60-day episode of care, these claims are subject to the Pre-Claim Review process.
  • If a new admission (start of care OASIS) is required, a new Pre-Claim Review request must be submitted by the agency.
  • If a beneficiary transfers to another home health agency during a 60-day episode of care, the RECEIVING home health agency must submit a Pre-Claim Review Please note, even if a beneficiary with a “provisionally affirmed decision” transfers to another home health agency during the same 60-day episode of care, the RECEIVING home health agency must still submit its own Pre-Claim Review request.

X. What Happens When a Claim is Submitted for Pre-Claim Review?

CMS is requiring that Palmetto make a decision and notify an agency within 10 business days (excluding federal holidays) of the initial submission for Pre-Claim Review.   Palmetto will assign a “Unique Tracking Number” (UTN) to each decision.  The decision will advise the submitting agency whether the claim is “affirmed” or non-affirmed.”   Each decision will include:

  • The UTN that has been assigned to the episode / decision.
  • Which HCPCS were affirmed.
  • A detailed explanation of which requirements were not met (if any).
  • Importantly, a provisional affirmation decision is only a preliminary finding that a future claim submitted to Medicare for the service likely meets Medicare’s coverage, coding and payment requirements.
  • A provisional affirmative decision only applies to the episode for which the Pre-Claim Review request was submitted.

XI. What Happens When Some HCPCS Codes Are Affirmed and Some are Denied?

In some instances, you may find that a Pre-Claim Review decision includes both affirmed and non-affirmed HCPCS codes. Should this occur, you can:

  • Submit the final claim with all the HCPCS codes with the UTN and the provisionally affirmed HCPCS will approve for payment and the non-affirmed HCPCS will deny with appeals rights.
  • Resubmit the PCR for the non-affirmed HCPCS codes which would result in a new UTN based on that decision which would then need to be used on the final claim.

XII. What Does it Mean When a Non-Affirmed Decision is Issued by Palmetto?

More often than not, it means that the documentation submitted does not meet one or more of Medicare’s requirements. Each notification of non-affirmation will include:

  • The UTN for the non-affirmed claim.
  • A listing of which HCPCS codes were not affirmed.
  • A detailed explanation of which requirements have not been met in order for the HCPCS codes at issue to qualify to be affirmed.

XIII. Impact of Home Health Pre-Claim Reviews on Small and Mid-Sized Home Health Agencies in Texas.

Your costs to process a claim will be significantly higher for the next three years.  The additional paperwork and effort to submit an episode for Pre-Claim Review are non-compensated and will likely prove challenging for agencies currently facing rising costs and ever-diminishing profit margins.

While CMS has issued deadlines (10 business days / 20 business days) for Palmetto to issue decisions in initial requests and resubmissions, it remains to be seen whether these deadlines will be met.  Home health agencies should anticipate delays, regardless of the goals that have been set for Palmetto. Even if Palmetto is able to process Pre-Claim review requests within its stated deadlines, home health agencies should expect to receive a significant percentage of denials (at least until it becomes more clear what Palmetto expect to see).  These denials will result in cash-flow delays.

Unfortunately, the administrative appeals process remains broken.  If you are unable to obtain a provisionally affirmed decision, you will likely face 3 – 5 years appealing a denial through Medicare’s appeal process.  Unless small and mid-sized agencies work to aggressively improve their compliance with applicable LCD rules, documentation, coverage and payment requirements, we anticipate a number of closures over the next three years.

Pre-Claim ReviewsRobert W. Liles, M.B.A., M.S., J.D., serves as Managing Partner at Liles Parker, Attorneys & Counselors at Law. Liles Parker is a boutique health law firm, with offices in Washington DC, Houston TX, San Antonio TX, McAllen TX and Baton Rouge LA. Robert represents home health agencies and other health care providers around the country in connection with Medicare, Medicaid and private payor audit actions. Our firm also represents health care providers in connection with federal and state regulatory reviews and investigations.

For a free consultation, call Robert at: 1 (800) 475-1900.


[1] 42 U.S.C. 1395b-1(a)(1)(J).

OIG Report on the Nationwide Background Check Program

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OIG's Nationwide Background Check Program details risks faced by home health agencies.(July 23, 2014):  Rightly or wrongly, critics of our nation’s long-term care system have long cited incidents of patient abuse, neglect, and the alleged misappropriation of funds among the identified widespread problems many seniors face when receiving long-term care and treatment services.  In an effort to address these problems, legislators were sure to include provisions in the Affordable Care Act (ACA) aimed at reducing the likelihood that an individual with a prior criminal conviction will be hired to care for seniors.  Section 6201 of the ACA established the framework for a nationwide program to conduct background checks at the state level of all individuals seeking employment in direct patient access positions within long-term care facilities or with long-term care providers.  Notably, the term “long-term care” includes skilled nursing facilities, nursing homes, home health agencies, long-term care hospitals and residential care facilities.  The term also includes intermediate care facilities for individuals with intellectual disabilities. The purpose of this article is to examine the actions of home health agencies and whether or not they are meeting their obligations to properly conduct background checks on prospective employees who would have direct patient access is hired.  In response to a recent Congressional request, the Department of Health and Human Services, Office of Inspector General (OIG) initiated two evaluations regarding the employment of individuals with criminal convictions in one specific type of long-term care environment: home health agencies (HHAs). Following the first evaluation, OIG published a report setting out its findings, many of which will be invaluable to CMS its administration of the “Nationwide Background Check Program.”

I. Purpose of the Nationwide Background Check Program Study:

As OIG report reflects, the agency surveyed state officials from all 50 states (and the District of Columbia) to determine:

     1.  State requirements for conducting background checks for prospective HHA employees,

     2.  Job positions for which states require HHAs to conduct background checks, and

     3.  Types of convictions that states consider to be disqualifying from HHA employment.

II. Results of the Nationwide Background Check Program Study:

OIG also found that the practices below are being followed:

1. Forty-one states

  • require HHAs to conduct background checks on potential employees, and
  • verify this compliance.

2. Ten states have no background check requirement, but four of these reported that they have plans to implement background check requirements in the future.

3. Thirty-five states specify convictions that disqualify individuals from employment.

4. Sixteen states allow an individual who has been disqualified from employment to submit an application to have his/her conviction(s) waived.

The thirty-five states that specify convictions that disqualify individuals from HHA all have different disqualifying convictions. For example, Wisconsin prohibits an individual from HHA employment if he was convicted of homicide, battery, and sexual assault. Minnesota, on the other hand, groups disqualifying convictions into categories which are split up by the time that must have elapsed between the discharge of the sentence imposed and eligibility for HHA employment. Minnesota’s categories are:

     1.  7 years (misdemeanor domestic assault)

     2.  10 years (misdemeanor receiving stolen property)

     3.  15 years (felony robbery)

     4.  Forever (kidnapping)

III. Final Remarks:

While federal laws and regulations requiring that HHA’s conduct background checks on potential employees  or prohibit HHAs from hiring individuals who have been convicted of crimes, HHAs must comply with State background check laws to participate in Medicare. The OIG study revealed that states have very different requirements in regard to whether background checks have to be conducted, what sources of information need to be checked, which job postings must have background checks, and what types of convictions disqualify an individual from HHA employment.

In 2012, HHAs provided services to approximately 3.5 million Medicare beneficiaries and Medicare paid nearly $18.5 billion for these services.  Given these huge numbers, it is easy to see why HHA background checks are important to protect patients and avoid Medicare fraud.

In addition to suggesting that the information in the report will be useful to CMS in administering the Nationwide Background Check Program, OIG also states the study may be useful to states that are considering establishing or enhancing background-check requirements.

Robert W. Liles

Liles Parker attorneys represent health care suppliers and providers around the country in connection with regulatory compliance reviews, Medicare audits, HIPAA Omnibus Rule risk assessments, privacy breach matters, and State Medical Board inquiries. Robert W. Liles, Esq., is a Managing Partner at Liles Parker, Attorneys & Counselors at Law.  Call Robert for a free consultation at: 1 (800) 475-1906.