CMS has announced a new three-year Medicare “pre-claim review” demonstration for home health services in five states — Illinois, Florida, Texas, Michigan, and Massachusetts  — with “high incidences of fraud and improper payments for these services.”  The pre-claim review demonstration requires currently-mandated documentation to be furnished to the Medicare Administrative Contractor (MAC) earlier in the claims payment process.  The initiative does not require the home health agencies (HHAs) to wait for a determination prior to furnishing services, however, nor does it modify the scope of the Medicare home health services benefit.  CMS expects this initiative to “bolster the efforts that CMS and its partners have taken in implementing a series of anti-fraud initiatives in these states,” such as the use of temporary moratoria on the enrollment of new home health providers in selected geographic areas.

Under the demonstration, each HHA will be expected to submit to its MAC a request for pre-claim review, accompanied by all relevant documentation to support Medicare coverage of the applicable home health level of service (the pre-claim review request would be submitted after the Request for Anticipated Payment is submitted and services are initiated).  The MAC will review the request to determine whether the service level complies with applicable Medicare coverage and clinical documentation requirements, and it will communicate to the HHA and the beneficiary a decision provisionally approving or disapproving payment.  For initial pre-claim review request submissions, the MAC will make all reasonable efforts to make a determination and issue a decision notice within 10 business days.  If the MAC declines payment after review, the submitter may amend and resubmit the request an unlimited number of times (the timeline for notice in such instances would be 20 business days).  If an applicable claim is submitted for payment without a pre-claim review decision, the claim will be stopped for prepayment review and documentation will be requested.  After the first three months of the demonstration in a particular state, CMS will apply a 25% payment reduction to claims that are deemed payable but did not first receive a pre-claim review decision (this reduction is not subject to appeal and cannot be recouped from the beneficiary).

CMS intends to phase in the program between August 1, 2016 and January 1, 2017.  Specifically, the demonstration is scheduled to begin as follows:

  • Illinois — not earlier than August 1, 2016
  • Florida — not earlier than October 1, 2016
  • Texas — not earlier than December 1, 2016
  • Michigan and Massachusetts — not earlier than January 1, 2017

Providers in the impacted states will be notified by their MAC prior to the start of the demonstration.  CMS will host an Open Door Forum call to discuss this demonstration on June 28.