Audits Coming to Home Health and Hospice in Most States

Posted On:

Rhonda Perrin Oaks, RN, CHP By Rhonda Perrin Oakes, RN, CHPN 
Regulatory Analyst, Change Healthcare
Home Health Audits

The Centers for Medicare & Medicaid Services (CMS) has approved home health for review with Recovery Audit Contractor (RAC) Performant Recovery Inc. The audits are scheduled to begin soon in 42 non-demonstration states. Is your organization ready?

Performant is expected to conduct “a complex home health review for documentation and medical necessity,” according to an announcement posted January 10, 2018, by CMS. In this process, Performant has authority over all home care organizations, except for those in the demonstration states of Delaware, District of Columbia, Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina, Virginia, and West Virginia.

The scope of the audit includes claim paid dates within three years of the additional documentation request (ADR) date. The affected revenue codes are 027X, 042X, 043X, 044X, 055X, 056X and 057X, which hits nearly all home care services.

CMS charged RACs with expanding the claim/provider types subject to review, which is why home health audits are set to begin. RACs also face certain limits over how many ADRs can be issued to a home health agency during a 45-day window.

More detailed information can be found on the Performant website, but selected highlights are outlined below.

Discussion period

Following the receipt of the additional information, Performant has 30 days to complete the complex review and return findings to the provider. Once the home health agency receives the report, it has 30 days to file a discussion request, which triggers a secondary review. This discussion period allows the RAC to consider additional information, audit the account again and either uphold or overturn the original decision.

 If an organization feels a ruling, even after the discussion period, warrants further review, an appeal with the MAC can be filed. The addition of a discussion period is designed to lessen the burden on both MACs as well as home health organizations by trying to stem appeals. During the discussion period, no adjustment information is sent to the MAC.

ADR limits

A RAC has 30 days to complete complex reviews and return findings to the provider, then it must wait 30 days before sending any adjustment to a MAC to wait for a discussion period request.

Each provider has an annual ADR limit that’s determined by CMS, then divided by eight to establish an upper limit of requests for each 45-day period. ADR letters are sent out every 45 days, and each provider can be queried only once during that period, so a provider can be queried no more than eight times during a year.

RACs cannot overturn more than 10% of claims at the first appeal level, excluding those denied because of no/insufficient documentation or claims that were corrected during the appeal process. RACs also must maintain a 95% or better accuracy rate or risk a reduction in ADR limits for subsequent periods.

Records reimbursement

Fortunately, the legislation provides for medical records reimbursement for home health organizations. Not all providers can be reimbursed, for example, suppliers of durable medical equipment, prosthetics, orthotics and supplies.

The fee schedule, which will be reimbursed without an invoice, includes:

  • 12 cents per page, plus first-class postage, for PPS provider records
  • 15 cents per page, plus first class postage, for non-PPS institutions and practitioner records

For electronic records, $2 will be added in lieu of postage. Overall, the maximum payment per medical record is capped at $25.

Only time will tell whether your home health organization gets called before the auditors. But that doesn’t mean you shouldn’t prepare now for that possibility. Take advantage of sending electronic records when possible to save on agency resources. Change Healthcare is monitoring the situation closely and will issue updates as needed.

For the latest in home health and hospice news, visit our Regulatory News or Home Health News sections on our blog.

The information provided in this Change Healthcare site is provided to you for informational purposes only. The materials are general in nature, are not offered to you as advice on a particular matter, and should not be relied on as such. Use of this web site does not constitute a legal contract or consulting relationship between Change Healthcare and you.

Leave a Reply

Your email address will not be published. Required fields are marked *