Pre-claim review has started

We always hope for the best; that the information provided on a new compliance measure will actually be followed.  But, we also hold back some hope knowing that the new government imposed requirement is going to be a nightmare…


For agencies in Illinois, the nightmare became a reality over the past couple of months and is likely worse than could have been imagined.  Palmetto is the Illinois intermediary, and is also the intermediary for Florida and Texas…Florida’s participation begins October 1st and Texas’ participation begins on December 1st.


If an intermediary – Palmetto being the largest in claim processing and states served – can’t handle timely responses to ADRs and RACs, how will it handle processing 10-20 pages of documentation for each patient?  Not well at all and Illinois is just the first state to deal with the ill prepared and poorly managed system of document processing.


Recent reports from Illinois agencies indicate hour long submissions processes, lost documentation and no record from Palmetto of ever receiving documentation.  The online submission site, meant to make the process easier, is also falling short.  So far, CMS – 1, Illinois agencies – 0.


Agencies lucky enough to have their documentation “received” by Palmetto still face a continuous uphill battle. The current rejection rate for submitted documentation is 80% according to agency reports. Most rejections are due to home bound status or the explanation and proof of need for home health services not being accepted by Palmetto.  Even submissions that present clear and concise explanations for homebound status receive rejections.


Rejections aren’t easy to fix either.  The pre-authorization demonstration allows agencies to resubmit corrected documentation as many times as necessary to get accepted. But an agency first needs to know what to correct. Cryptic and generic rejection explanations, which offer little agency guidance on how to correct, educate, and improve are being received.


Since the continuous problems are accumulating and not being addressed, agencies are resorting to drastic measures. Some agencies are just closing, but most are trying to wait it out.  Waiting it out is beginning to slow the access to care as agencies are waiting to receive pre-authorization approval before admitting patients and starting services.


Should this practice continue with more states added, we can expect to see an industry wide slowdown in admissions in affected states. The situation is getting so bad that both Florida Senators have written a joint letter to CMS requesting the demonstration be put on hold while alternatives are sought to deal with the backlog and poor workflow.  The National Association for Home Care and Hospice (NAHC) and The Visiting Nurse Association of America (VNAA) are also working on lobbying efforts to force CMS into pulling back some of the regulation and ensuring timely processing with clear explanations.


Smaller agencies with tight cash flow are the most affected and the national agencies such as Amedisys are taking notice. Amedisys and many other publicly traded chains are getting excited at the idea of continued consolidation across the country.  The pre-claim review is quickly turning into survival of the fittest – those agencies with access to lines of credit, cash reserves and other forms of financing.


The current timeline and implementation for the other 4 states is:

  • Florida: October 1st – Palmetto
  • Texas: November 1st – Palmetto
  • Massachusetts and Michigan: January 1st – NGS


We will keep readers updated as the demonstration period continues and hopefully will have positive news to report in the coming months.