As part of their continued efforts to reduced fraud in waste within the home health care industry, CMS has gone forward with its three-year pre-claim authorization demonstration project, beginning in Illinois on August 1.

So far, the response to the demonstration has been less than enthusiastic. Despite promises by CMS that the pre-claim authorizations would not interrupt the delivery of care, and would not create bottlenecks in the processing of claims, according to agencies involved in the demonstration as well as the National Association of Home Care and Hospice, the transition has been anything but smooth.

Problems in Illinois

When CMS first announced the pre-claim demonstration project, agencies and leaders in the field, including NAHC, expressed concern not only about the potential that the project could delay or disrupt care, but that it could also divert resources away from the delivery of patient care. However, given that nearly 60 percent of home health claims had some type of error in them last year, CMS determined that moving forward was the best option.

In the little more than a month since the demonstration began, though, Illinois agencies report serious problems. For starters, many agencies are reporting that the Medicare Administrative Contractors, the independent organizations hired to review the pre-claims, have excessively high rates of denials, usually due to documentation getting lost in the electronic claims systems.

In fact, some agencies report being told that they did not complete requirements, when in fact they did. The result is that not only are MAC’s seeing a significant increase in claims volume, which is slowing down the reviews, but agencies are also devoting more time than expected to manage the claims process.

Perhaps even more concerning, though, is the fact that the agencies’ primary concerns, about the disruption or delay of care, are all proving to be legitimate. Some agencies, concerned about the high rates of rejected pre-claims and the cumbersome process of resubmitting them for affirmation, are actually delaying care up to several days until it can be straightened out. Because the terms of the pre-claim review dictate that agencies that do not submit a pre-claim for authorization will be penalized 25 percent of the reimbursement, it’s simply not feasible for most agencies to skip the process altogether.

These problems that are affecting the project in just the first few weeks of the demonstration have many leaders concerned. In fact, Florida Senators Marco Rubio (R) and Ben Nelson (D) have actually reached out to CMS and asked them to reconsider or delay the pre-claim authorization project in Florida until they can more effectively demonstrate the value that the project will bring to the home health care industry and the money it will save. Despite the pleas, though, CMS continues to move forward with the project and still plans to launch in Florida in October.

Preparing Your Agency

Whether or not your agency is located in one of the first five states for this demonstration project (in addition to Illinois and Florida, Texas, Massachusetts, and Michigan are on deck for the next few months) you need to be looking at the project and determining how you are going to meet the requirements of the pre-claim review while still managing patient care effectively.

Most importantly, you need to spend some time reviewing your current operations and identifying the processes and procedures that need to be put in place to ensure that the pre-claim review process goes as smoothly and efficiently as possible. More specifically, you need to have an efficient way of collecting and submitting the required documentation for pre-claim reviews (your home health agency software will be invaluable in this process).

You also need to determine a process for responding to MAC decisions on pre-claim reviews that are not affirmed or require additional documentation, and for resubmitting the documentation in a timely manner when necessary. One area that many HHA’s are struggling with is the physician order signature tracking, so you may need to make additional changes to your procedures to ensure you get those orders in time to submit the pre-claim authorization request.

It’s also useful for HHA’s, especially those that are not yet involved with the demonstration, to stay abreast of the news about the project and confirm that they have the most current and up-to-date information about how the project is being implemented. The MACs are also conducting training and providing resources about their specific requirements and processes, and it is useful to learn about them before you are part of the demonstration to avoid any potential bottlenecks when it is your turn.

All of that being said, there are bound to be changes to the pre-claim authorization process based on the results of this demonstration, especially considering the troubles that agencies are having in Illinois. Stay tuned for more information and updates from Complia Health, and check out some of our resources to learn more about how our advanced software solutions can help your agency meet the challenges of the new health care landscape.