Florida is one of five states that the Centers for Medicare & Medicaid Services (CMS) is targeting for a three-year Medicare pre-claim review demonstration for home healthcare services. However, just how this program will work has raised questions in the home healthcare community.
CMS says the steps it is taking are designed to “provide timely and appropriate home health services to Medicare beneficiaries, while protecting the Medicare Trust Funds and taxpayer funds from fraud and improper payments.”
The demonstration comes because of a 59 percent improper payment rate among home health claims in 2015, according to CMS. A large proportion of the improper payment rate was because of insufficient documentation.
“Through this demonstration, CMS aims to test the level of resources required for the prevention of fraud instead of engaging in “pay and chase” and to determine the feasibility of performing pre-claim review to prevent payment for services that have high incidences of fraud,” notes CMS.
Under this demonstration, physicians and clinicians who participate in the federal Medicare program will continue to make healthcare decisions in coordination with their patients, including creating a care plan for the types of home health services a beneficiary needs. Once home health services are ordered by their physicians, an eligible beneficiary should be able to receive Medicare’s home health services immediately.
The main change under this demonstration, according to CMS, is that home health agencies will have to submit the supporting documentation while beneficiaries are receiving care. This earlier submission of documentation will undergo the new “pre-claim review.”
In most cases, the home health agency that is providing the care will gather all of the required documentation and submit it for pre-claim review. This is the same documentation they currently gather for payment, only it will have to be submitted earlier in the process.
Medicare will then review the documentation to determine if all coverage requirements for home health services are met and will issue a pre-claim review decision generally within 10 days, according to CMS.
If the documentation is not sufficient, then either the home health agency, or the beneficiary, can submit additional documentation to support the claim. Once sufficient documentation is submitted, Medicare will make timely payment on the home health services claim following the standard process. The supporting documentation can be resubmitted as many times as necessary during the pre-claim review.
If a claim is not approved during the pre-claim process, CMS will deny the final claim for payment. However, the home health agency can appeal. If the home health agency fails to submit a request for pre-claim review, but submits the final claim for payment, then the final claim will be subjected to a pre-payment medical review. In most cases, a beneficiary would not be liable for expenses in a home health claim that has been denied.
“This new process should decrease improper payments because of insufficient documentation, as well as reduce the need for HHAs to appeal claims,” according to CMS.
After the first three months of the demonstration in each participating state, if the claim is submitted without a pre-claim review and is determined to be payable, it will be paid with a 25 percent reduction of the full claim amount. This payment reduction is not subject to appeal and cannot be recouped from or otherwise charged to the beneficiary.
The pre-claim review demonstration will begin in Illinois no earlier than August 1. Florida will follow after Oct. 1, with the remaining states phasing in. Home health agencies should be preparing for what lies ahead. If you have any questions about the process and how to remain in compliance, contact the Health Care Offices of Anthony C. Vitale.
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