Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

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CMS Announces Pre-Claims Reimbursement Review for Home Health

CMS will launch a pre-claims reimbursement review for home health services in five states to reduce Medicare fraud and help beneficiaries receive timely care.

By Jacqueline LaPointe

- In efforts to combat Medicare fraud and provide more timely care to beneficiaries, the Centers for Medicare and Medicaid Services (CMS) has issued a rule that requires some home health agencies to undergo a pre-claim review to qualify for full Medicare reimbursement for medical services.

CMS to launch pre-claims reimbursement review for home health services

According to a press release on its website, CMS will require home health agencies in certain states to submit pre-claim documentation to ensure that services are medically necessary and all documents are properly completed and present before payment.

The proposed demonstration is set to launch in Illinois starting no earlier than August, followed by Florida, Texas, Michigan, and Massachusetts during 2016 and 2017.

“Today, the Centers for Medicare & Medicaid Services (CMS) is taking important new steps 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,” stated the press release. “CMS will help make sure that home health services are medically necessary without delaying or disrupting patient care or access.”

Under the pre-claim demonstration, Medicare providers would still develop healthcare plans for eligible beneficiaries that detail home health services that are needed. However, CMS has modified the process by requiring home health agencies to present claim reimbursement documentation while the patient is receiving care.

READ MORE: CMS Suggests Hospital Medicare Reimbursement Policy Changes

The new requirement aims to help homebound Medicare beneficiaries immediately receive necessary medical services.

Additionally, prior authorization would not change eligibility standards or Medicare documentation requirements for home healthcare services, noted the press release.

Once pre-claim documentation is submitted, Medicare will review the pre-claim submission and determine if it meets all coverage requirements. The agency plans to notify home health agencies of decisions within ten days.

In some cases, Medicare may request additional documentation from the home health agency or the beneficiary, while in other cases the agency will pay the home healthcare provider following the standard process. Medicare may also deny the pre-claim, which would result in a final claims denial if the pre-claim submission is not resolved.

After the first three months of the demonstration in each state, CMS plans to penalize home health agencies that neglect to submit pre-claim documentation by reducing payments by 25 percent for the final, payable claim. The payment reduction cannot be appealed or recouped.

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CMS intends for the demonstration to train home health agencies on what documentation is required for claims submission and how to properly submit it.

Home health agencies have previously faced high rates of improper Medicare payments. In 2015, home health claims produced a 59 percent improper payment rate, largely due to insufficient documentation.

Through prior authorization processes, home health agencies will be able to resubmit supporting documentation as many times as it takes to resolve claims reimbursement issues. Medicare will also provide the agencies with reasons as to why a pre-claim submission was insufficient.

“This resubmission process helps HHAs successfully submit the necessary documentation before submitting a final claim for payment,” explained the press release. “This new process should decrease improper payments because of insufficient documentation, as well as reduce the need for HHAs [home health agencies] to appeal claims.”

However, if a pre-claim submission is denied and never resolved, then Medicare intends to deny the final claim, which can be appealed through a formal process, noted CMS. Claims that do not go through the prior authorization process will also be subject to a pre-payment medical view.

READ MORE: MedPAC Targets Post-Acute Care for Healthcare Payment Reform

CMS will also use the demonstration to discover what resources are needed to prevent Medicare fraud, waste, and abuse rather than use a “pay and chase” method.

“The pre-claim review process will be an additional and valuable tool in combating improper payments, while ensuring beneficiaries continue to receive certain medically necessary services within their homes in a timely manner,” stated CMS. “Many other health plans, including Medicare Advantage plans use a similar process for home health services.”

Despite potential benefits from pre-claim reviews for home health services, some lawmakers have criticized the program. In a letter to CMS, a group of 116 Congressman urged CMS to overturn prior authorization screening for home health agencies, citing administrative burdens and delayed patient care as reasons.

“Requiring prior approval for every home health patient across five states for critically important services that keep people in their homes rather than institutions, often when they are at their most medically vulnerable, will effectively delay and deny home health coverage for countless Medicare beneficiaries,” stated the letter.

Nevertheless, CMS plans to go ahead with pre-claim reviews for home medical services, which aims to reduce the improper payment rate for specific treatments. The agency explained that the program will have “robust monitoring in place” and it is willing to make adjustments to ensure the process works.

Dig Deeper:

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