The Impact of CMS’ New Pre-Claim Review Demonstration on Home Health Agencies

On June 8 CMS (Centers for Medicare and Medicaid Services) announced its soon to be implemented three-year Medicare pre-claim review demonstration (aka the “demonstration”) for home health agencies (HHAs). However, this new process will not affect all 50 states, at least initially. Instead it will be implemented in five states – Illinois, Florida, Texas, Michigan and Massachusetts. The first one will be Illinois, followed by Florida, and then Texas, Michigan and Massachusetts will take part in this new process. The exact start dates are yet to be determined, but the earliest Illinois would begin implementing the demonstration would be no earlier than August 1, 2016. These states were selected due to the high incidences of fraud and improper payments. However, the goal of the demonstration is to not only combat fraud and improper payments, but also to improve the quality of care provided to Medicare beneficiaries.

What the Demonstration Means for Your HHA

The pre-claim review process is another step HHAs must engage in to affirm coverage before a final claim is submitted for payment. With pre-claim review, the applicable coverage, payment and coding rules are met before the final claim is submitted. You may ask what is the difference between pre-claim review and prior authorization? Timing is the big differentiator! With prior authorization, a request is submitted before services start. Providers cannot begin any services until a decision is received. With pre-claim review, services have already begun. Initial assessments and intake procedures have been completed. Pre-claim review takes place during that window of time when the Request for Anticipated Payment (RAP) has been submitted and within 30 days of the first treatment provided to the beneficiary, but the final claim has not been submitted yet. The good news is that with the demonstration, no new documents are required, but the documentation for payment is just submitted earlier in the process. This new approach is more aligned with how commercial insurers operate, including some Medicare Advantage plans.

In 2015, home health claims experienced a 59 percent improper payment rate, with a large proportion being due to insufficient documentation. With the new pre-claim review process, home health agencies may still experience documentation errors. However, the HHA will be able to resubmit the request with additional documentation as many times as needed. The Medicare Administrative Contractors (MACs) will now have the added responsibility of working closely with the HHAs to explain what documentation is missing and how it consequently has resulted in an insufficient submission. However, claims that receive a provisional affirmation during the pre-claim review process will not be subject to additional reviews.

A Grace Period Will Ease the Initial Transition

If a HHA located in one of the five states mentioned submits a claim for payment without a pre-claim review request being submitted first, then the home health claim will undergo a pre-payment review. If it is payable then it will be paid minus 25 percent of the full claim amount. Since this reduction is non-transferrable, it will only affect the HHA, not the beneficiary. However, there is a grace period that is taken into consideration for the HHA. A payment reduction is not applicable during the first three months of the demonstration in a particular state.

Need Assistance?

Once the pre-claim review demonstration starts in these five states there are sure to be questions or concerns about this new process. It is critical that your staff does not spend valuable time resubmitting pre-claim review documentation or your agency is penalized for not submitting it at all. It is now a critical step in the claims submission process that cannot be overlooked. Let our experts at 5 Star ensure that your team submits the pre-claim review paperwork correctly and on time the first go around. Email us at [email protected] or give us a call at 866-428-4040 to make certain you and your team are ready when CMS implements the demonstration in your state.

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Southern Web SupportThe Impact of CMS’ New Pre-Claim Review Demonstration on Home Health Agencies
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