CMS Pauses Home Health Pre-Claim Review Demonstration

April 05, 2017 - CMS recently halted the home health Pre-Claim Review demonstration in Illinois for 30 days and the program will not expand to Florida as expected in April 2017, according to the federal agency’s website.

“After March 31, 2017, and continuing throughout the pause, the Medicare Administrative Contractors will not accept any Pre-Claim Review requests,” the official Pre-Claim Review demonstration webpage stated.

In June 2016, CMS finalized a rule that would require home health agencies in five states to submit Medicare claims to an administrative contractor for review prior to claims reimbursement. Through the pre-claim submission reviews, contractors ensure that medical services listed on the claim were medically necessary and clinical documentation requirements are met.

The federal agency designed the program to combat healthcare fraud, waste, and abuse in the home health setting.

The home health industry led the way in a $900 false medical billing case in June 2016, according to an HHS and Department of Justice (DoJ) healthcare fraud takedown. The federal departments partnered to charge 301 individuals, including 61 physicians and licensed medical professionals, with allegedly partaking in healthcare fraud schemes.

The reported fraudulent activities largely involved home health services as well as psychotherapy, physical and occupational therapy, durable medical equipment, and prescription drug items and services.

HHS and DoJ reported that the June 2016 charges represented the largest healthcare fraud takedown in history for the departments.

In response to home health fraud, CMS developed the pre-claim review initiative to stop potential Medicare fraud and educate home health providers on correct claim submission processes.

The federal agency developed an implementation schedule for five states, starting with Illinois, Florida, and Texas in 2016 and Massachusetts and Michigan in 2017.

Some policymakers and industry groups opposed the home health program, arguing the demonstration would impact healthcare costs and care access.

“This demonstration project imposes costs on patients, providers, and taxpayers,” a group of 116 Congress members stated in a May 2016 letter to CMS. “Delaying patient care while waiting for CMS to approve home health services may put patient health in jeopardy and cause patients to stay in the hospital longer than necessary.”

The Partnership for Quality Home Healthcare also urged CMS to eliminate the home health Pre-Claim Review demonstration. The group offered to work with CMS to “develop program integrity solutions that are patient-centered and eliminate bad actors without disrupting access to care and increasing healthcare costs.”

However, CMS went through with installing the home health Pre-Claim Review demonstration in Illinois on August 3, 2016.

But the federal agency decided to delay program expansion to additional states. Florida’s new launch date moved from October 1, 2016 to April 1, 2017, while the other three states have yet to receive a definitive launch day.

“Based on early information from Illinois, CMS believes additional education efforts will be helpful before expansion of the demonstration to other states,” CMS wrote on the demonstration’s webpage in October 2016. “The education efforts will focus on how to submit pre-claim review requests, documentation requirements, and common reasons for non-affirmation.”

The most recent CMS announcement may be the second delay for Florida, but it is the first demonstration pause for Illinois home health agencies.

During the 30-day halt, Medicare Administrative Contractors will not accept nor review any pre-claim submissions. Instead, home health providers in the state should bill Medicare under the normal claim processing rules.

CMS noted that it plans to communicate any home health Pre-Claim Review demonstration updates or changes via the program’s webpage at least 30 days in advance.