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CMS Announces Home Health Pre-Claim Review Demonstration Project for Five States

July 5, 2016 by  
Filed under Home Health & Hospice

Pre-Claim Review(July 5, 2016) The Centers for Medicare and Medicaid Services (CMS) has announced a home health pre-claim review demonstration project to be initiated in five states. According to CMS, the purpose of the new project is to prevent improper Medicare payments, enhance quality of care, and deter waste, fraud, and abuse in the Medicare program. This pre-claim review demonstration will impact home health agencies in Illinois, Florida, Texas, Massachusetts, and Michigan.

According to the Operational Guide released by CMS, the general contours of this new project will be as follows:

  • Agencies will continue to submit requests for anticipated payment (RAPs) as usual.
  • At some point prior to submission of the claim for the end of episode (EOE) payment, agencies will be required to submit documentation to the Medicare Administrative Contractor (MAC) that substantiates the beneficiary is homebound, requires intermittent skilled care, and that a physician has certified the beneficiary’s eligibility for home health services.
  • The MAC will render a provisional pre-claim review decision to either affirm or non-affirm coverage of the services within 10 days of receiving the agency’s documentation. The decision letter will contain a rationale for the determination.
  • If the pre-claim review decision is affirmed, the agency can then submit the EOE at the appropriate time and will receive payment as usual.
  • If coverage is non-affirmed upon pre-claim review, the decision letter should contain the reason(s) for that determination. The agency will then have an unlimited number of opportunities to submit additional documentation to further corroborate that the services meet Medicare coverage rules. Those subsequent pre-claim review decisions will either affirm or non-affirm coverage for the claim. MACs will be required to render decisions regarding resubmitted documentation within 20 days of receipt.
  • If an agency submits an EOE after receiving a non-affirmed pre-claim review decision, the EOE will be denied and the RAP will be recouped. The provider will then be able to appeal that denial.
  • CMS has portrayed the pre-claim review process as “voluntary.” However, if an agency submits an EOE without first obtaining an affirmed pre-claim review decision, payment will be immediately stopped and the claim will be subject to pre-payment review. If the reviewer approves the claim upon pre-payment review, the reimbursement for the claim will be reduced 25%. This penalty is non-appealable. If the pre-payment review decision is unfavorable, the RAP will be recouped and the provider may appeal that denial.

CMS and the home health MACs will roll out this demonstration gradually throughout the five target states over the course of six months:

  • Illinois: August 1, 2016
  • Florida: October 1, 2016
  • Texas: December 1, 2016
  • Michigan and Massachusetts: January 1, 2017

In cases where providers do not opt to participate in the pre-claim review process, CMS has stated that the 25% penalty component of the project will be phased in three months after the commencement dates listed above.

According to Palmetto GBA, the home health MAC for Illinois, Florida, and Texas, providers will be able to submit the requested documentation via mail, facsimile, or an online portal.

Home health agencies across the five target states along with other stakeholders have aptly expressed concern as to the need for and potential ramifications of this demonstration project. Agencies are already under enormous pressure, for example, to obtain physician orders within specified timeframes along with appropriate face-to-face documentation from the certifying physicians. The pre-claim review project will only exacerbate those difficulties. In the meantime, agencies will now be expected to continue providing care to beneficiaries without any assurance that they will receive reimbursement for their services.

In our opinion, some of the biggest concerns with this demonstration relate to the timeliness and quality of the pre-claim reviews along with the possibility that the same claims could be subject to multiple audits by different entities.

Although CMS has stated that the MACs will “make every effort” to review pre-claim submissions within 10 days of receipt, there is no assurance they will consistently meet this goal. Unfortunately, the project guidelines announced by CMS do not contain any remedies for providers whose requests may be subject to lengthy processing delays.

The second concern principally relates to the quality of reviews and the adequacy of the explanations provided for “non-affirmed” decisions. Chapter 7 of CMS’ Operational Guide does not contain any requirements as to how detailed those explanations will be. If the MAC’s reasons for “non-affirming” coverage are vague or non-specific, as most unfavorable claim or appeal decisions by Medicare contractors tend to be, then many providers will be left wondering how to improve their documentation or what other records to furnish upon resubmission. This could result in significant delays in reimbursement for many agencies and substantial negative impact on otherwise compliant providers.

CMS has affirmatively stated that claims subject to the pre-claim review process will not be exempt from targeted reviews performed by other entities, such as Zone Program Integrity Contractors. Even the medical review staff at the MAC – the same entity charged with performing the pre-claim reviews – could theoretically initiate targeted medical review of home health agencies. CMS has not indicated whether claims submitted for pre-claim review could also be audited by the Recovery Audit Contractors or the Supplemental Medical Review Contractor. CMS has not offered any justification for the tremendous administrative burdens that serial audits of the same claims could impose on agencies.

In light of this new demonstration project, we recommend that agencies in all of the five states take the following steps to prepare for pre-claim review:

  • CMS has not specified exactly what documentation must be submitted with each pre-claim review request. However, the MACs are currently developing checklists for providers to use when preparing their documentation. Agencies should closely monitor their MAC’s website for this information and review it as soon as it is available. This will likely be an important tool when compiling documentation for submission.
  • Pre-claim review will apply to all home health claims – including recertification episodes – in target states as of the effective dates specified above. For example, initial face-to-face encounter documentation must be submitted with pre-claim review requests for all recertification episodes, even if the face-to-face was performed before the commencement of the demonstration project in that agency’s state. For this reason, providers should not wait to begin reviewing their documentation and searching for ways to improve it. We strongly recommend that providers initiate internal auditing protocols now, irrespective of when the demonstration may begin in their state.
  • Face-to-face documentation will likely play a key role in many pre-claim review decisions. If they have not already done so, we recommend that agencies conduct inservices with their physician referral sources now regarding timeliness and content requirements of face-to-face encounter records. If some physicians consistently refuse to document adequate or timely face-to-face encounters, agencies should consider no longer accepting referrals from those physicians.
  • Agencies should be aware that pre-claim review will likely disrupt their ordinary revenue cycles and begin taking appropriate action.
  • Agencies should regularly review Medicare coverage requirements for home health services as set forth in the Medicare Benefit Policy Manual. Moreover, agencies should familiarize themselves with the local coverage determinations (LCDs) of their MACs, which also contain guidelines for home health care. Palmetto GBA, for example, has LCDs that relate to physical / occupational / speech therapy services and home health care provided to beneficiaries with diabetes mellitus, among other topics.
  • To speed up the pre-claim review process, agencies should submit documentation via the MAC’s secure web portal instead of by mail or fax.
  • We recommend that agencies always utilize the pre-claim review process. The 25% payment reduction is too steep a penalty for non-compliance, particularly since any such claims would still be subject to pre-payment review upon submission of the EOE.

If you have questions regarding this new home health pre-claim review process, you should contact an experienced attorney to discuss additional steps that you could take to minimize the potential negative impact that this initiative will have on your agency.

Pre-Claim ReviewLiles Parker attorneys assist providers across the country with all matters related to claim appeals, reimbursement, enrollment, compliance, and corporate formation / transactions. If you have questions or concerns about a pending Medicare claim appeal, please contact Adam Bird for a free consultation.  He can be reached at:  1 (800) 475-1906.