The Centers for Medicare & Medicaid Services (CMS) announced that the Home Health Pre-Claim Review Demonstration (PCRD) to begin in Florida has been put on hold. The demonstration will be put on hold for at least 30 days in Illinois, beginning April 1, 2017, and will not expand to Florida as scheduled on April 1, CMS announced Friday, March 31. CMS has plans to change the PCRD demonstration by changing the pre-claim review to an optional process for home health agencies. HHAs that use PCR will be exempted from the risks of post-pay review if there is no indication of fraud. CMS also wants to move to a more targeted approach that focuses on indications of inappropriate behavior, such as activity in the first episode of care, certain diagnoses and HHAs that do not demonstrate a sufficient level of compliance performance.

The CMS Pre-Claim Review Demonstration for Home Health  that began in Illinois on August 3, 2016 resulted in providers experiencing significant disruptions and technical failures during the claims submission process due to difficulty using the Medicare Administrative Contractor’s (MAC) electronic submission system, as well as providers reporting inappropriate care denials. The Centers for Medicare & Medicaid Services (CMS) is implementing a three-year Pre-Claim Review Demonstration for Home Health Services in the state of Illinois beginning in 2016, and in the states of Florida, Texas, Michigan and Massachusetts beginning in 2017. Pre-Claim Review Demonstration for Home Health Services in Florida will be implemented for services that begin on or after April 1, 2017. 

Fortunately, CMS believes additional education efforts will be helpful before expansion of the demonstration to other states; therefore, they will not move forward with initiating the demonstration in Florida in October.  Good news. This education effort will focus on how to submit pre-claim review requests, documentation requirements, and common reasons for non-affirmation.     

CMS is testing whether pre-claim review improves methods for the identification, investigation, and prosecution of Medicare fraud occurring among Home Health Agencies (HHAs) providing services to people with Medicare benefits.  Additionally, CMS is also testing whether the demonstration helps reduce expenditures while maintaining or improving quality of care.  

If HHAs in the demonstration states do not utilize the pre-claim review process, those claims submitted for payment will be stopped for prepayment review and may be subject to denial.  After the first three months of the demonstration in a participating state, CMS will reduce payment by 25 percent for claims that are deemed payable but did not first receive a pre-claim review decision.

CMS released a FAQ information sheet on September 15, 2016 to address some of the issues in the Pre-Claim Review Demonstration.

We appreciate that Sens. Ben Nelson (D) and Marco Rubio (R) sent a letter to Andy Slavitt, Acting Administrator of the Centers for Medicare & Medicaid Services (CMS)  urging CMS to delay expansion of the Pre-Claim Review Demonstration into Florida and the other states until CMS, stakeholders, and Congress have the opportunity to evaluate and understand the impact of the demonstration in Illinois.

Congressmen Tom Price, MD (R-GA) and Jim McGovern (D-MA), as well as original cosponsors Reps. Kenny Marchant (R-TX), Mac Thornberry (R-TX), Louie Gohmert (R-TX) and Buddy Carter (R-GA), introduced the Pre-Claim Undermines Seniors’ Health (PUSH) Act of 2016. The legislation if passed would delay the Medicare demonstration for pre-claim review of home health services for one year to allow Congress, the Centers for Medicare & Medicaid Services (CMS) and home health stakeholders to work together to strengthen the program and improve education and training to ensure patient care is not delayed or that individual beneficiaries are not unjustly denied coverage.

LeadingAge believes it is not appropriate to impose this additional regulatory requirement for all the providers in these 5 states when the incidence of fraud is being addressed with moratoria in the specific counties where there is an indication of fraud. Also, we are concerned that providers that are providing quality care may either stop offering home health services,  not acquire or open new home health agencies in states that have the pre-claim review because of the additional operational costs.