Home Health Claims Pre-Payment Review: Too Burdensome

Regulation | June 12, 2018 | by Ruth Katz

On the evening of May 29, CMS announced that it will be “taking steps to dramatically improve program integrity for the Medicare Home Health benefit.” That announcement, combined with a May 30 Federal Register request for comments and a set of Frequently Asked Questions CMS published May 31, fills in the details of the supposed dramatic improvement.

According to CMS, the new “Review Choice Demonstration for Home Health Services…offers new flexibility and choice for providers and implements…changes that reward providers for being compliant…while vigorously protecting precious federal program resources.” The "flexible" new demonstration will require that 100% of Home Health claims in Illinois, Ohio, North Carolina, Texas and Florida (and possibly others in the Palmetto/JM Medicare Administrative Contractor jurisdiction, at CMS’s option) will be reviewed prior to being paid. These states were chosen because they are “known areas of fraudulent behavior.”

This demonstration was originally begun in 2016 in Florida. It was delayed eight months after it began and before it expanded into a second state, Illinois, because it resulted in massive payment delays and paperwork logjams. Nevertheless, it did recoup over $100 million in fraudulent claims during those eight months. Congress has been pressuring CMS to restart the demonstration.

This revised demonstration offers providers the option of a pre-claim review or a post-claim review prior to payment approval. A third “choice,” to not submit claims for review would result in a 25% reduction in all payments to the home health agency. The original demonstration was limited to pre-claim review and agencies that did not submit claims for pre-review sustained a 25% reduction in payments for non-compliance.

The revised demonstration also rewards providers who are compliant with program guidelines (i.e., with Medicare billing, coding and coverage requirements), by determining that provider’s next steps under the demonstration. The demo will begin no sooner than October 1, 2018 and go for five years.

With high numbers of home health claims being found to be submitting fraudulent claims nationwide, LeadingAge recognizes that CMS must find ways to identify and combat fraud. However, instituting a “choice” demonstration that will likely harm beneficiaries and impede access to care is not the solution. The demonstration will lead to delays at best and potentially chaos and confusion. Further, it is not clear that this demonstration will help CMS develop improved procedures to identify, investigate and prosecute Medicare fraud.

The majority of providers, including diligent not for profit Home Health providers, should not have to suffer in the process of identifying those engaged in fraudulent behavior and taking steps to correct the problem. LeadingAge will be responding to the CMS request for comments on the level of burden the new demonstration will impose on providers and consumers.