Pre-Claim Review Demonstration Slated for December

Second iteration of demonstration poses challenge for home health providers

Illinois is a state often cited as being something of a microcosm for the country, and if that is any indication, home health providers not just there, but everywhere, will want to keep an eye on the second iteration of a demonstration project currently being teed up by the Centers for Medicare & Medicaid Services (CMS).

That’s according to remarks made during the latest edition of Monitor Mondays by William A. Dombi, president of the National Association for Home Care & Hospice (NAHC).

“Pre-claim review was something which took place in the second half of 2016 and first quarter of 2017, and it had a significant impact on home health in Illinois, to a tune of about a $100 million annualized reduction in Medicare spending,” Dombi said. “The new (second) version is now known as the Review Choice Demonstration Program.”

Whereas the first version of the demonstration project closely focused on pre-claim review, there’s a key difference this time around, reflected in the title, Dombi explained.

“The main difference is that there are (now) options that home health agencies have. Option one is to have all claims go through a pre-claim review process; if the provider chooses that option and then does not submit for pre-claim review, the claim will automatically be denied,” he said. “The second option is to have all claims go through post-payment review; that would put the provider of services in a bit more of a risk position relative to the delivery of care, and then determining whether or not they will be able to keep the payment.”

“The third option, in my view, is no option at all,” Dombi continued. “In that case, the provider would not go through pre-claim or post-payment review, but instead would accept a 25 percent rate reduction and then be susceptible to a RAC (Recovery Audit Contractor) review. The 25 percent rate reduction, for our view, is fairly telling, and we’ve recommended to CMS that any home health agency that chooses that option should be referred to the FBI for investigation; a 25 percent rate reduction should be unsustainable, except by people who are committing fraud.”

One other notable modification from the first version of the demonstration is that a provider that has a 90 percent affirmation rate after six months of submissions now could choose to be exempted from further pre-claim review, with the exception of spot-checking at about a 5 percent random incidence.

While the new demonstration project is slated to begin no earlier than Dec. 10, that date has already been pushed back, from Oct. 1, Dombi noted. There have not been dates set for the launch of the project in the four other participating states: Ohio, North Carolina, Florida, or Texas.

If the first version of the demonstration was any indication, and if the second version translates into a broader, more permanent push for change, providers all over could be in for a bumpy ride – at least at first.

“There were quite a few operational difficulties with the first generation of pre-claim review. CMS does now state that they have fixed many of those things; we will wait and see if that is true or not,” Dombi said. “The essence of the program is essentially to ferret out fraud, but in fact, more than anything else, it dealt with high volumes of documentation issues, all correctable by most providers of services.”

“The Illinois experience was an interesting one; a tremendous amount of administrative burden, tremendous amount of paperwork, and at the early stages, many, many of the pre-claim reviews were rejections,” Dombi added. “Later, though, (these) transformed into affirmations when the paperwork problems were corrected. Eventually, most of the providers of services had virtually a 100 percent acceptance rate, but it took seven to nine months to get there. This will be an interesting trip for home health agencies in Illinois.”

Dombi was named NAHC president in February, having held the title in an interim capacity since August 2017, following the passing of NAHC’s longtime president, Val J. Halamandaris. Dombi is also the director of the Center for Health Care Law and the Executive Director of the Home Care and Hospice Financial Managers Association.

The National Association for Home Care & Hospice represents the nation’s 33,000 home care and hospice providers, along with the more than two million nurses, therapists, and aides they employ. The Association estimates that 12 million patients depend on such providers.

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