What Our Home Health Consultants Say About CMS's Pre-Claim Review Reboot


The home health space is buzzing about CMS's announcement to reinstate pre-claim review. Originally rolled out in 2016, pre-claim requires providers to submit 100% of claims with supporting documentation prior to final claims for approval or be subject to a 25% payment reduction for all claims while still subject to RAC. The program was paused indefinitely in 2017.

CMS estimates its new proposal would cost home health agencies in Illinois, Ohio, North Carolina, Florida and Texas about $24 million per year in extra administrative burden -- that's based on a scenario where submissions and resubmissions only require 30 minutes to complete.

The federal cost associated with performing review for home health services under the revised demonstration would be about $393 million during the entire five-year demonstration period, according to CMS.

It's fair to say many in the industry aren't pleased with the announcement for fear it will slow care delivery and business.

At the same time, others say if your processes and care quality are already strong, pre-claim may not have much of an effect. For instance, here are quotes from Amedisys and LHC's leadership in a recent Home Health Care News story:

LHC Group's CEO Keith Myers via Home Health Care News: “In our first round, we had to build the system and get people trained for it, but [we] had a 95% accuracy rate,” Myers said of submitted claims at the Jefferies 2018 Global Healthcare Conference in New York. “In the new rule, if you’re 90% or better you get a free pass as long as you stay above that.”

Amedisys's CEO Paul Kusserow via Home Health Care News: “We had been through [pre-claim review- two years ago,” Kusserow said. “We found it was relatively ineffective … but we took it seriously and performed very well in it.”

Here's what some of our home health consultants think about CMS's pre-claim review reboot announcement:

Lorie Owens: Based on statements from industry experts across the country, pre-claim is likely to return in some fashion as we are one of the few without a pre-authorization. A pre-authorization process would be more labor intensive and delay care. The newly proposed pre-claim is expected to begin October 1, 2018 across 5 states with potential to expand to other states in the Palmetto/JM Home Health & Hospice Jurisdiction and is a 5 year demonstration. I would expect the demonstration to expand rapidly into other states and do not expect to see it go away any time soon.

In the meantime, agencies need to be prepared! The pre-claim process has the potential to further chip away at profit margins and productivity. Therefore, home health agencies have to make sure they're gaining efficiencies wherever possible. There is opportunity here for every agency to optimize technology, streamline and improve documentation and drive EHRs to be more intuitive.

Gina Creel: Agencies are dealing with a lot right now as they prepare for compliance with the new COPs. Our industry already has a full plate when it comes to regulations. The man hours it requires to submit documentation for either pre-claim or post-claim reviews is unsurmountable. If agencies don’t choose either one, then they would sacrifice 25% reimbursement and potentially be subjected to RAC or other audits. That's harsh.

Why not do what has been done in the past — review a percentage of claims, then based on the denial rate, make a determination of what type of additional audits need to be done.

While some regulations are necessary, I'm afraid pre-claim will require too much administrative burden that will detract from patient care.

Here's NAHC's press release responding to CMS's Pre-Claim Review announcement:

On May 29, the Centers for Medicare and Medicaid Services (CMS) announced the restarting of a demonstration program that involves a greatly expanded review of Medicare home health claims in certain target states. The program, Pre-Claim Review Demonstration for Home Health Services (PCRD), originally started in August 2016 in Illinois. It was suspended effective March 30 without expansion into other targeted states. The revised PCRD slightly modifies the program in three ways:

  1. The targeted states have been partly changed to include Illinois, Texas, Florida, Ohio, and North Carolina while dropping Michigan and Massachusetts;

  2. Home health agencies (HHAs) are given a choice of 100% pre-claim review, 100% post-payment review, or a 25% payment rate reduction and potentialclaim review by the Recovery Audit Contractor; and

  3. HHAs can qualify for an exemption based on certain, unstated performance standards.

“The return of pre-claim revenue, even with revisions, is premature and may be entirely unnecessary,” stated 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 2016-2017 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 thanpre-claim review. CMS has not pursued or considered any of those alternatives,” Dombi stated. “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. The Illinois experience demonstrated that any concern is limited to correctable paperwork errors.”

In response to the CMS announcement, NAHC and its partnering state home care associations have initiated advocacy efforts to secure public release of all the data from the original project, conduct a thorough evaluation of the outcomes from that project, evaluate the best alternatives to pre-claim review that can address any deficiencies uncovered through the project, and institute appropriate corrective measures that do not needlessly increase administrative burdens and costs of care. “We cannot accept any new regulatory burdens that waste precious clinical resources that should be devoted to patient care, not a paper-chase,” stated Dombi. “While the home care community has been a leader in developing effective program integrity measures, CMS has fallen far short of justifying a restart of this burdensome program. We must oppose it and strongly recommend that CMS open the promised discussions on viable alternatives,” he added.

What are your thoughts on CMS's announcement to reboot pre-claim review? We'd love to hear from you.


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