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Pre-Claim Review: What Home Health Agencies Should Know

Sarah McIlvaine
Author | Shield HealthCare
01/04/17  3:56 PM PST
pre-claim review

Update: As of 4/28/17, the Pre-Claim Review (PCR) Demonstration has been paused by the Centers for Medicare and Medicaid Services, pending review while CMS considers structural improvements. Click here for a PDF of PCR Demonstration Pause Questions and Answers.

What is the Pre-claim Review Demonstration?

Pre-claim review is a demonstration initiated by the Centers for Medicare and Medicaid Services (CMS) in an attempt to curb Medicare fraud in the home health industry. The CMS may also be able to reduce its costs with this project. The five states with the greatest levels of fraud and billing abuse were selected to participate in the three-year demonstration. 

The CMS states that the demonstration does not create new clinical documentation requirements, but instead requires that the same documentation be submitted earlier in the process. The pre-claim review submission can be completed at any time before the final claim submission, even after the start of care. Home health agencies that fail to follow the pre-claim review process will be subject to pre-payment review and could have their claims denied.

Potential Penalties

Three months after the initiation of the pre-claim review demonstration in a state, the CMS will reduce payments by twenty-five percent on claims that are payable but do not follow the pre-claim review process.

Why was the Pre-claim Review Demonstration established?

According to the CMS, the Pre-Claim Review Demonstration was created to “assure that all relevant coverage and clinical documentation requirements are met before a claim is submitted for payment.” The program may help with cost reduction, and will be implemented in the states that have shown the highest levels of Medicare fraud in home health billing.

Where is the Pre-claim Review Demonstration effective?

Five states were chosen for pre-claim review: Illinois, Florida, Texas, Michigan and Massachusetts. These states were selected since they had demonstrated instances of home health fraud and billing abuse that were significantly greater than abuses in other states.

What is the schedule for implementation of pre-claim review?

The demonstration began in Illinois in August, 2015. Controversy over low affirmation rates, and the introduction of the PUSH Act (see below) delayed the roll-out in Texas which had been scheduled for December 1st, 2016. However, with affirmation rates now reportedly on the rise in Illinois, the CMS announced that the demonstration will continue into Florida on April 1st of 2017. The CMS has not announced the dates for the demonstration in the other 3 involved states: Texas, Michigan, and Massachusetts. Update: Effective 4/28/17, the PCR demonstration has been paused pending review. See these PCR Demonstration Pause Questions and Answers for more information on how claims will be processed while the Demonstration is paused.

What is the rule regarding patients who reside in neighboring states?

If a patient resides in a neighboring state, pre-claim review will still apply to billing for that patient.

What are the current affirmation rates in Illinois?

Affirmation rates have been on the rise, with the latest rate of 89.4% affirmation in the 20th week of the demonstration (week ending 12/17/2016.) Affirmation rates remained above 89% throughout December, having previously reached 85% in November.

What is the PUSH Act?

Pre-Claim Undermines Seniors’ Health (PUSH) Act H.R. 6226 is a bill that was sponsored by Tom Price Rep., Trump’s pick to head the Department of Health and Human Services. The bill does not appear likely to pass anytime soon, but the changes in government in January 2017 will bring some changes, perhaps including a hold on pre-claim review once Price is transitioned in.


Next Article:

Get Ready For OASIS-C2 Changes Coming in 2017

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