CMS Implements Home Health Pre-Claim Review in 5 States

The Centers for Medicare & Medicaid Services (CMS) recently launched a demonstration project that will initiate a pre-claim review for home health services. The project seeks to lower a nearly 60 percent claims error rate stemming largely from insufficient documentation.

According to a CMS announcement, care decisions and ordering of home health services will continue without interruption. Under the demonstration project, however, home health agencies (HHAs) will need to submit supporting documentation while beneficiaries are receiving care. No new documentation requirements are imposed under the demonstration project.

Medicare will review the submitted documentation to determine if all coverage requirements for home health services have been met. CMS indicated that the pre-claim decision should typically be made within 10 days.

If the documentation is insufficient, HHAs will be given an opportunity to supplement their submission with additional documentation.

CMS initiated this demonstration project to educate HHAs on the documentation requirement because “[i]n 2015, home health claims had a 59% improper payment rate, and a large proportion of the improper payment rate was because of insufficient documentation.”

Appeal rights for a denied claim that has gone through the pre-claim process are available. However, within the first three months, if the HHAs claims fail to go through the pre-claims process but are ultimately submitted for payment, the final claim will be subjected to a pre-payment medical review. Following the three month grace period in the demonstration states, if the HHA claim is submitted without a pre-claim review and is determined to be payable, it will be subject to a 25 percent reduction of the full claim amount. According to CMS, this reduction is not subject to appeal and cannot be recouped from or otherwise charged to the beneficiary.

The demonstration project is an additional signal to home health providers nationally that documenting services they provide are under heavy scrutiny from the federal agencies. In its 2016 Workplan, the Office of Inspector General highlighted its intent to review home health claims for compliance with federal laws and regulations, adding that “[s]ince 2010, nearly $1 billion in improper Medicare payments and fraud has been identified relating to the home health benefit.” OIG’s mid-year plan reiterated the agency’s attention on home health claims.

If you have questions about the CMS demonstration project, provider enrollment, revalidation, revocation or have other health law questions, please contact our office