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

Policy & Regulation News

Congress Asks CMS to Scrap Prior Authorization for Home Health

Congress hopes CMS will reconsider its proposed demonstration for prior authorization for home health services.

By Catherine Sampson

A CMS proposal to require a prior authorization screening for every home health service would be an administrative nightmare and may produce barriers to care for needy patients, a group of 116 lawmakers said in a letter to CMS this week.

"This demonstration project imposes costs on patients, providers and taxpayers,” the letter said. “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."

In February 2016, CMS proposed a prior authorization demonstration program for Medicare home health services n in Florida, Texas, Illinois, Michigan, and Massachusetts. The announcement was included in a Paperwork Reduction Act notice in the Federal Register. These states, excluding Massachusetts, are currently involved in the HHS/Department of Justice fraud enforcement program.

The goal of the demonstration is to prevent fraud and improper payments within home healthcare, an area of the healthcare system rife with wrongdoing.

However, the lawmakers argued that a prior authorization demonstration would put an administrative burden on both home healthcare agencies and physicians who had no track record of fraud, and may do little to prevent instances of improper payments.

If there was prior authorization of home healthcare, patients in the demonstration states would be unable to receive  services right after a physician orders home healthcare. They would have to wait for an intermediary to review and approve the order, the letter explained.

If a home health agency attempted to provide services without prior authorization, it would be subject to a 25 percent payment reduction.

Lawmakers expressed the most concern about the impacts prior authorization could have on patient access to healthcare. About 3.5 million of Medicare’s beneficiaries depend on home healthcare services. Often times, this patient population is made up of elderly, low-income individuals that have serious illnesses.

“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,” the letter said.

If patients faced delays during the critical hospital-to-home transition, they could experience complications that result in costly preventable readmissions.  

The plan would require CMS to review more than 900,000 claims per year at an approximate cost of more than a quarter of a billion dollars, the letter added.  This would place a significant burden on the taxpayers with little demonstrable reward, the letter said.

Lawmakers also cautioned that there is no legal authority to impose prior authorization for Medicare home health. Although the Secretary of HHS has the authority to develop improved methods to investigate and prosecute fraud, the proposed prior authorization requirement would not be a method to handle fraud. It would be a method for screening and utilization management.

On May 26, 2016, the Partnership for Quality Home Healthcare commended the group of lawmakers for sending the letter to CMS and HHS and asked CMS to work with them to come up with solutions to reduce the amount of home healthcare fraud.

"We recognize the intent of the proposal is to combat fraud and abuse within the home healthcare community, but instead of penalizing patients, taxpayers and providers, we ask that CMS work with us to develop program integrity solutions that are patient centered and eliminate bad actors without disrupting access to care and increasing healthcare costs," said Keith Myers, Chairman of the Partnership for Quality Home Healthcare.

In addition to the Partnership for Quality Home Healthcare, The National Association for Home Care & Hospice also expressed concerns about the prior authorization. The association believes a prior authorization program would raise administrative costs with little or no return.

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