Pre-Claim Review Demonstration Project Kicks Off

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Rhonda Oakes By Rhonda Oakes 
Regulatory Analyst, Change Healthcare
Pre-Claim Review Demonstration

The tension continues to build over the Centers for Medicare & Medicaid Services’ (CMS) Pre-Claim Review Demonstration of Home Health Services, set to begin in Illinois on August 1, 2016.

One hundred-sixteen Members of Congress have signed a letter protesting the three-year demonstration, which would require prior authorization for home health visits in five states: Florida, Illinois, Massachusetts, Michigan and Texas. The items of contention are the prior authorization requirement and the 25% reduction in reimbursement when prior authorization is not received, even if the episode is later deemed appropriate.

The letter, addressed to Sylvia Burwell, secretary of the Department of Health and Human Services, and acting CMS Administrator Andrew Slavitt, notes that CMS would have to review 900,000 potential pre-authorization requests yearly in the five states.

“The demonstration project could limit access to home health services, while generating long and costlier hospital stays and potentially increasing readmission rates,” the letter states. “Many patients find themselves in the most clinically fragile condition during the week following a hospital discharge. It is vitally important that we continue to meet the care needs of Medicare patients during this critical transition time post-hospital discharge.”

How the Program Works

The demonstration will begin no earlier than:

  • August 1, 2016 in Illinois
  • October 1, 2016 in Florida
  • December 1, 2016 in Texas
  • January 1, 2017 in Michigan and Massachusetts

Home health organizations in the impacted states will gather the same documentation they currently do for reimbursement but will submit it earlier in the care cycle.

Organizations will continue to provide initial services and receive initial payments prior to the pre-claim review decision, which will be applied to the final request for anticipated payment (RAP). A home health organization may resubmit supporting documentation as many times as necessary during the pre-claim review.

During the pre-claim review, Medicare will work closely with organizations to explain what documentation is needed and why a prior submission was insufficient. The demonstration also aligns Medicare’s payment requirements and approach with commercial insurers, including some Medicare Advantage plans

Primarily led by Medicare and Medicaid, the healthcare industry is in the midst of adjusting to how care is delivered and paid for. The move from fee-for-service to value based payment and alternative payment models is well received by the majority and will be pivotal in patients receiving the right care, in the right setting, at the right time whenever possible.

We all agree this should not compromise the quality of patient care. The timing of the prior authorization demonstration adds an additional burden to the five states called out in the rule and a double burden to Massachusetts and Florida as they are mandated to participate in the Home Health Value Based Purchasing initiative. There is so much at stake to ensure successful alternative payment models, and many of you are involved in the CMS Innovation Center in accountable care organizations, bundled payment initiatives and Medicare Care Choice Model, to name just three.

In justifying the demonstration, CMS points to a large increase in improper reimbursements for home health care, more than $9 billion in FY 2014. However, 90% of errors were attributed to insufficient documentation.

Having the right management software for your home health agency goes a long way toward ensuring that documentation requirements are being met. And as the demonstration moves closer, know that we are in this together.

5 Responses to Pre-Claim Review Demonstration Project Kicks Off

  1. Bob Peters says:

    What is McKesson Homecare software going to do to help agencies manage the pre-claim review process?

    • Rhonda Oakes says:

      Hi Bob,
      Great question. Our Pre-Claim Review Workgroup is finalizing the changes that will be delivered in our solution to help decrease the administrative burden. If you are interested I can connect you with the workgroup as well.

  2. Bob Peters says:

    Yes Please. Thanks

  3. Please include me in the workgroup so we may stay abreast to the changes that McKesson is making for the pre-claim review process

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