In Depth

On May 31, 2018, the Centers for Medicare and Medicaid Services (CMS) published a Federal Register Notice proposing to reinstate a controversial claim review demonstration project whereby CMS would review 100 percent of home health agency (HHA) claims. CMS had previously postponed a similar demonstration in April 2017.

Under the proposed revamped HHA claim review demonstration project, CMS proposes to initially include Illinois, Ohio, North Carolina, Florida and Texas, with the option to expand to other states in the Palmetto/JM jurisdiction. CMS is currently proposing to give HHAs two options related to their claim review: a) 100 percent pre-payment claim review or b) 100 percent post-payment claim review. If an HHA does not wish to submit to either post- or pre-payment review, CMS is proposing that the HHA will receive a 25 percent payment reduction on all submitted claims and may be eligible for review by Recovery Audit Contractors (RACs). CMS does note an HHA may be exempted from the review after if it attains a “target” pre-claim review affirmation or post-payment review claim approval rate, notwithstanding the HHA may still be subject to potential “spot checks” of claims. CMS did not elaborate as to what this “target” number might be.

A 100 percent claim review poses a significant administrative burden on HHAs. Further, it is unclear how the additional review responsibilities potentially foisted on Medicare Administrative Contractors will affect the timeliness of Medicare reimbursement for providers. We recommend HHAs begin to implement additional “compliance checks” and review their Medicare billing compliance and documentation procedures to ensure that they receive full payment for their billed services under this heightened CMS scrutiny paradigm.

Providers have the opportunity to submit comments to CMS related to the notice and proposed demonstration for 60 days, ending July 30, 2018.