NAHC Considers Suit to Halt Pre-Claim Review Demonstration Project

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Rhonda Oakes By Rhonda Oakes 
Regulatory Analyst, Change Healthcare
health insurance claims

On October 25, the National Association for Home Care & Hospice (NAHC) announced that its board authorized a lawsuit against the Centers for Medicare and Medicaid Services (CMS) in connection with CMS’ Pre-Claim Review (PCR) Demonstration for Home Health Services.

According to the NAHC announcement, “PCR is currently ravaging our Illinois members and threatening to do the same across the country The Center for Medicare & Medicaid Services (CMS) has postponed extending the demonstration project beyond Illinois.

Five states were originally scheduled to participate in the demonstration, with Florida and Texas beginning this year after Illinois, followed by Michigan and Massachusetts in 2017. Six weeks after the demonstration started in Illinois on August 1st, CMS announced a delay in the rest of the states, subject to a 30-day notice to resume.

NAHC President Val Halamandaris announced plans to lead a tour of the state to highlight the damage that pre-claim reviews are doing to patients and providers in Illinois. Halamandaris believes the tough stand is necessary.

Troubled Start to Demonstration

Members of Congress objected to the PCR demonstration before it had even been implemented. In May, more than 100 members of Congress from both parties signed a letter to Department of Health and Human Services Secretary Sylvia Mathews Burwell and acting CMS Director Andrew M. Slavitt protesting pre-claim reviews. The signatories said they believed prior authorization “would interfere with the patient-doctor relationship and is in conflict with the policy goal of moving toward patient-centered care.”

The letter noted that prior authorization has never been required for post-acute care within Medicare fee-for-service and that such authorization “will effectively delay and deny home health coverage for countless Medicare beneficiaries.”

Writing about earlier developments, I pointed out that many home health organizations in the demonstration areas already are participating in other mandated or voluntary care, quality and reimbursement models. Even with the most effective agency management software, there comes a breaking point where additional documentation requirements exceed the ability for the organization to keep pace.

In an October 21st update, CMS indicated that 78% of pre-claim review requests in Illinois received a provisionally affirmed or partially affirmed decision. Since beneficiaries receive multiple home health services, a partially affirmed decision means a decision was reached on at least one of multiple services. Think about the number of patients you serve and multiply that by the number of services that each patient receives. Now think about tracking what service has been provisionally affirmed, partially affirmed, denied, more information, etc., and you begin to understand why some in the industry have strong emotions over this issue.

In announcing the possibility of a lawsuit, NAHC’s Vice President for Law William Dombi called pre-claim review “the scourge of homecare.” It’s not enough to show harm to providers, Dombi said, but to show harm to patients. NAHC believes it to be the case.

We’ll follow this closely as the data from CMS is showing improvements in affirmed requests when compared to the troubled start.

  • Statistics released Nov. 4 from CMS for week 13, which ended on 10/29/2016: 83 percent of pre-claim review requests in Illinois received an affirmed or partially affirmed decision.
  • During week 8, the affirmed or partially affirmed rate was 66 percent.

The area that is not transparent is the breakout of the affirmed vs. partially affirmed; for example, a partially affirmed decision may be $300.00 for a $3,000.00 claim. This difference could present issues for home health agencies.

Home health agencies intend to meet federal requirements; however, it is quite likely that this situation will continue to be a challenge for agencies. We probably have not heard the last word on the issue.

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