Beginning August 1, 2016, the Centers for Medicare & Medicaid Services (CMS) will be implementing a three-year Medicare pre-claim review demonstration for home health services in the states of Illinois, Florida, and Texas. Michigan and Massachusetts will follow in 2017. CMS is testing whether pre-claim review will help it prevent fraud occurring in Home Health Agencies (HHAs) as well as whether or not pre-claim review will help reduce expenditures while maintaining or improving quality of care.

During the pre-claim review demonstration period, HHAs will submit the same information they currently submit for payment, but will be required to do so earlier in the claims process. CMS contractors will then review all relevant coverage and clinical documentation requirements before the claim is submitted for payment and will issue a pre-claim review decision generally within 10 days. If the documentation submitted was not sufficient, then the HHA (or beneficiary) may submit additional documentation to support the claim. Once sufficient documentation is submitted, Medicare will make payment on the claim following the standard claims payment process.

HHAs will begin submitting pre-claim review requests in: Illinois beginning no earlier than August 1, 2016; Florida no earlier than October 1, 2016; Texas no earlier than December 1, 2016; and Michigan and Massachusetts no earlier than January 1, 2017. According to CMS, if HHAs in the demonstration states do not utilize the pre-claim review process, those claims submitted for payment will be stopped for prepayment review and may be subject to denial. After the first three months of the demonstration in each participating state, if a claim is submitted without a pre-claim review and is determined to be payable, CMS will pay it with a twenty-five (25%) percent reduction of the full claim amount. According to CMS, this payment reduction is not subject to appeal and cannot be recouped from or otherwise charged to the beneficiary.