Simione™ Healthcare Consultants

The CMS Pre-Claim Review Demonstration: Preparing Home Health Agencies for the Who, What, When, Where, Why and How

Simione Healthcare Consultants is pleased to provide this summary of the key provisions of the CMS Pre-Claim Review Demonstration, which was announced in the Federal Register on June 10, 2016. Home health providers in the five demonstration states (IL, FL, TX, MI, MA) must quickly implement new processes to meet the requirements of this new mandate, even though much of the implementation processes are still being developed between CMS and the Medicare Administrative Contractors (MACs). 

Who is included in this demonstration?

CMS announced a Medicare pre-claim review demonstration for home health agencies (HHAs) that provide home health services and are enrolled in the Medicare program. The program requires HHAs within each of the participating states to submit a pre-claim review request and the necessary documentation to their respective Medicare Administrative Contractor (MAC) for Medicare fee for service patients.

Where & When does the demonstration occur?

  • Illinois: no earlier than August 1, 2016 - MAC is Palmetto
  • Florida: no earlier than October 1, 2016 - MAC is Palmetto (included in HH Value Based Purchasing pilot)
  • Texas: no earlier than December 1, 2016 - MAC is Palmetto
  • Michigan: no earlier than January 1, 2017 - MAC is NGS
  • Massachusetts: no earlier than January 1, 2017 - MAC is NGS (included in HH Value Based Purchasing pilot)
  • The demonstration will last for three years after implementation in each state.
  • During the first three months after that start date within each state, the final claims that are deemed payable without having a pre-claim review request will not be subject to a payment reduction (described below).

Why is this demonstration being implemented?

  • CMS is seeking to increase program reliability by moving away from a reactive model based on making payments and then “chasing down” fraudulent claims or improper payments:
    • The 2015 improper payment rate for HHA claims increased to 59.0% from 51.4% in 2014, and 17.3% in 2013.
    • The main cause of the increase in the 2015 improper payment rate was insufficient documentation errors, specifically the documentation required to support medical necessity of the services provided.
  • CMS is moving toward a more proactive strategy that identifies potential improper payments before they are made.
  • The demonstration will provide an estimate of the resources required to implement a permanent pre-claim review program for home health services.
  • The demonstration will help determine the feasibility of executing pre-claim reviews in order to prevent payment for services that have had a high frequency of fraud in the past.
  • The demonstration will identify the return on investment of pre-claim review for home health claims.

What is involved in the demonstration?

  • HHAs submit documentation to support medical necessity for each episode (start of care and recertification) to the MAC prior to billing the final claim.
  • According to CMS on two recent Special Open Door Forums, all of the documentation required for submission is already being collected by HHAs; therefore, CMS does not view this demonstration as an additional burden.  HHAs recognize that there are, in fact, significant additional operational burdens associated with this new requirement.
  • CMS and the MACs have not yet stated the exact documentation that will be required for the pre-claim review request, except to indicate that the HHA must provide all documentation to support Medicare eligibility and medical necessity. Some of this documentation may include:
    • Signed Plan of Care (CMS has stated that a Plan of Care signed by the physician must be submitted with the pre-claim review documentation.)
    • Signed Face-To-Face Encounter Visit Documentation
    • OASIS Assessment
    • Therapy Evaluations
    • Start of Care Narrative Documentation
    • Additional visit notes if this documentation supports Medicare eligibility and medical necessity.
  • The MAC will “affirm” or “not affirm” each episode and will “make all reasonable efforts” to inform the HHA of its decision within 10 business days of the pre-claim review request.
  • CMS has clarified that the pre-claim review process will not impact the third party liability documentation submission requirements for HHAs within states with this requirement (i.e., Massachusetts). Other processes that will not change include:
    • All Advanced Beneficiary Notice (ABN) policies
    • Claim appeal rights
    • Dual eligible coverage
    • Private insurance coverage
  • The MAC will include the reason(s) for episodes that are “not affirmed” (i.e., “insufficient documentation”) and the HHA may resubmit the episode for pre-claim review with additional documentation prior to billing the final claim.
    • The episode may be resubmitted an unlimited number of times.
    • The MAC will “make all reasonable efforts” to inform the HHA of its decision within 20 business days of the resubmitted pre-claim review request.
  • CMS has stated that an “affirmed” decision on a pre-claim review request does not necessarily make the final claim for that episode exempt from further post-payment audits, or denials if claim submission requirements are not met. Although the goal of the pre-payment review affirmation is to significantly minimize these audits, CMS and the MAC may continue to conduct post-payment audits to address focused areas. Some audits that may continue to occur include:
    • Compressive Error Rate Testing (CERT)
    • Zone Program Integrity Contractors (ZPIC)
    • Recovery Audit Contractors (RAC)
  • Pre-claim review requests may be submitted via:
    • Mail
    • Facsimile
    • Online through the MAC portal (where available). HHAs are strongly encouraged to utilize the portal if available.
  • The HHA will be informed of the determination in the same manner as the request was submitted with the beneficiary receiving a copy of the determination in the mail.
  • HHAs should continue to submit the RAP through their normal process in order to support cash-flow.
    • Pre-claim review demonstration will not affect RAP payments.
  • Participation in the demonstration is encouraged by CMS:
    • CMS has indicated that after the first three months any final claims submitted that have not been “affirmed” through pre-claim review will have the final payment reduced by 25%.
    • The Medicare beneficiary is not liable for the 25% cut in reimbursement to the HHA.
  • CMS claims that the pre-claim review demonstration does not create new documentation requirements.
    • The demonstration requires that the currently mandated documentation be filed earlier in the claims process. This includes obtaining a signed physician-ordered plan of care prior to submission of the initial pre-claim review request.
  • There are no additional changes to the home health service benefit for Medicare fee-for service beneficiaries.

How should HHAs start to prepare for the demonstration?

  • HHAs should assess current operations to ensure implementation of processes and procedures are in place for internal monitoring of the pre-claim review requests as well as the decisions received from their respective MAC.
    • These processes and procedures should provide the HHA with an efficient means of:
  • Collecting the required documentation for the pre-claim review requests
  • Submitting the required documentation for the pre-claim review requests
  • Tracking the MAC’s decisions on each pre-claim review request
  • Collecting missing documentation for pre-claim review requests that were “not affirmed” for “insufficient documentation”
  • Resubmitting the required documentation for pre-claim review requests that were “not affirmed”
  • HHAs may need to modify physician order signature tracking practices to ensure an even more timely receipt of signed plans of care in order to submit the pre-claims audit.
  • HHAs should monitor days’ sales outstanding (DSOs), as well as their days to RAP and days to final both before and after the demonstration.
    • These metrics will help the HHA to recognize any impact the demonstration has on Medicare revenue and cash flow.
    • Continuously tracking these metrics will also help identify if any pre-claim review process implementation is adding efficiency to the HHA.
    • HHAs should stay abreast of information related to the pre-claim review demonstration to ensure current information for implementation of the demo as information becomes available. This includes listening in on any CMS Special Open Door Forums, and reviewing documentation available on the CMS website such as Fact Sheets and Updated Frequently Asked Questions.  The MACs are also initiating training and information related to their specific requirements for the pre-claim review demonstration. Some key sources for information include:
    • Pre-Claim Review Demonstration for Home Health Services:
    • The providers’ Medicare Administrative Contractor (MAC):

With over 50 years of dedicated services for home care and hospice, Simione Healthcare Consultants has a breadth of expertise unmatched in our industry. Our consultants can help with all aspects of preparation and implementation of the pre-claim review demonstration, including, but not limited to the following:

  • Staff/management education
  • Operations assessments and process re-engineering to prepare for implementation of these requirements in a streamlined and cost effective way
  • Submission of claims as part of the pre-claim review demonstration process

 For information and assistance, contact [email protected] or call 800-949-0388. 

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