Home Health Agencies in CMS Crosshairs Again

CMS intends to target home health agencies in five states.

It looks like the Centers for Medicare & Medicaid Services (CMS) is going to be targeting home health agencies in several states with another attempt to reduce fraud.

Last week the agency announced that it is going to start another demonstration project in Illinois, Texas, Ohio, North Carolina, and Florida. This program will be a 100 percent claim review process.

If you are having déjà vu, it makes sense; CMS announced a 100 percent pre-payment claim review process in five states back in August of 2016. But that didn’t last long. The program started with only agencies in Illinois required to submit claims for review, and CMS announced in December that Florida would be added in April 2017, but that expansion never occurred, with CMS announcing that the program was being paused “to incorporate more flexibility and choice for providers.”

In this new iteration, home health agencies will have the option of submitting medical records prior to billing for the episode of care and getting approval to submit the claim (called pre-payment review) or submitting the claim, getting paid, and then submitting the records (called post-payment review). It appears that those that do well after an unspecified number of reviews will be no longer required to submit records, except for occasional “spot checks.”

But it appears that CMS did live up to their word and incorporate more flexibility, as they promised. Now, this is actually not a mandatory review process, because agencies have the option of not submitting any records. But if they choose that option, they get an across-the-board 25 percent payment reduction and will be subject to audit by the Recovery Audit Contractors (RACs).

Ambiguity is a hallmark of most CMS programs, and this potential referral to the RACs for agencies that don’t participate creates a big one. Based on the wording of the proposal, it is only the agencies that choose not to participate that can be referred to the RACs. But does that mean that those agencies that choose to participate are completely immune from RAC audit, even if they do poorly on their claim reviews?

There is also no indication of how long the 100 percent review will go on before an agency is told it can stop submitting every record. And most importantly, if CMS does start this program with all five states, it is unclear whether the contractor be able to review all these claims in a timely manner, because that’s a whole lot of charts to review. Since the majority of home care is provided to Medicare beneficiaries, if an agency has its payments held up for an extended period of time, its ability to remain financially viable may be in jeopardy.

So once again, CMS has proposed a demonstration with lots of questions and few answers. To their credit, when the program began in 2016, CMS was very forthcoming with data and updates.

One can only hope that such transparency continues with this iteration.

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