FutureFocus June 6, 2018: Pre-Claim Review Demo Re-Start - What You Need to Know

Lisa Remington

News permeated the industry as notice of the pre-claim review demonstration is restarting and expanding. The demonstration will impact 1.3 million claims each year. Of interest to our readers is the report issued by the congressional watchdog agency, the General Accounting Office (GAO). CMS wants to identify new opportunities for expanding prior authorizations for additional items and services with high unnecessary utilization and high improper payment rates. The CMS asked for public input on how it can ensure the new experiment doesn't harm access to care. Comments are due July 31.

Lisa Remington, President, Remington Health Strategy Group

By: Ronald M. Schwartz, Writer, The Remington Report

The Centers for Medicare & Medicaid Services (CMS) plans to restart its pre-claim review demonstration, claiming it will be much improved from the controversial program the agency put on hold over a year ago. CMS proposes implementing the demonstration in Illinois, Ohio, North Carolina, Florida and Texas, with the option to expand to other states. The demonstration will impact 1.3 million claims each year.

Compared to the earlier iteration, the new version according to the agency will offer “more flexibility and choice for providers, as well as risk-based changes to reward providers who show compliance with Medicare home health policies.”

Whether home health providers see it that way should become clear during the public comment period—however, early reaction is anything but favorable.

Stakeholders have a formal chance to comment. CMS posted a Federal Register Notice May 31, as part of the Paperwork Reduction Act (PRA) approval process, to allow providers the opportunity to review and comment on CMS’ intention to collect information from the public for the revised demonstration. Deadline for comments, July 30. Additional details on the demonstration and start dates will be published following PRA approval.

The ultimate goal of the new demo: Assist CMS in “developing improved procedures for the identification, investigation, and prosecution of Medicare fraud occurring among Home Health Agencies (HHA) providing services to Medicare beneficiaries.”

Provider Choice Key in New Vs. Old

Under the proposed demonstration, CMS intends to offer choices for providers to demonstrate their compliance with CMS' home health policies. Providers in the demonstration states may participate in either 100 percent pre-claim review or 100 percent post-payment review. These providers will continue to be subject to a review method until the HHA reaches “the target affirmation or claim approval rate.” Once HHA reaches the target pre-claim review affirmation or post-payment review claim approval rate, it may choose to be relieved from claim reviews, except for a spot check of their claims to ensure continued compliance.

"The ultimate goal of the new demo: Assist CMS in “developing improved procedures for the identification, investigation, and prosecution of Medicare fraud occurring among Home Health Agencies (HHA) providing services to Medicare beneficiaries.”

Providers not wishing to participate in either 100 percent pre-claim or post-payment reviews have the option to furnish home health services and submit the associated claim for payment without undergoing such reviews; however, they will receive a 25 percent payment reduction on all claims submitted for home health services and may be eligible for review by the Recovery Audit Contractors.

Option to Expand to Other States

One major difference from the previous demo is that of post-payment review. Another important difference, the states involved. CMS says it will implement the Demonstration for the Home Health and Hospice Medicare Administrative Contractor Jurisdiction M (Palmetto) providers operating in Illinois, Ohio, North Carolina, Florida, and Texas for five years, with the option to expand to other states in the Palmetto/JM Jurisdiction.

The previous, 3-year demo, when unveiled during the Obama administration, was to involve all HHAs in Illinois, Florida, and Texas beginning in 2016, and in the states of Michigan and Massachusetts beginning in 2017.

A broad swath of stakeholders, members of Congress, not to mention a sympathetic then-Health and Human Services Secretary, Tom Price, had helped derail the earlier demo.

CMS Will Need to Do Sell Job

“The return of pre­claim revenue, even with revisions, is premature and may be entirely unnecessary,” said William A. Dombi, president of the National Association for Home Care & Hospice. “CMS has not taken advantage of what it learned during PCRD in Illinois in 2016­2017 where claims errors that related to documentation were ultimately correctible,” he added. “The home care community also presented multiple and less burdensome alternatives to CMS that we believe will be equally or more effective than pre­claim review. CMS has not pursued or considered any of those alternatives. It would be prudent for CMS to look to these alternatives before requiring home health agencies to take staff away from patient care to chase after endless paperwork.”

Early stakeholder reaction also includes the American Hospital Association. Rochelle Archuleta, director of policy, stated: “AHA is very disappointed that, like the original demo, CMS is again proposing a state-wide intervention that burdens all home health agencies instead of using its proven, data-driven tactics to target specific types of fraud and high-risk areas and providers.”

The PRA notice is the first step in the regulatory process: Under the Paperwork Reduction Act of 1995, federal agencies are required to provide a Federal Register notice/comment period concerning each new collection of information and its associated regulatory “burden.”

The CMS asked for public input on how it can ensure the new experiment doesn't harm access to care. Comments are due July 31.

This new demonstration comes on top of a new home health groupings model which is kicking off next year.   The CMS estimates the new model will cut home health spending by $950 million, or 4.3%, in 2019.