Pre-Claim review is now a reality in 5 states

CMS is pressing ahead with a new regulatory burden on 5 states.  Pre-Claim reviews which was previously reported earlier this year as a potential demonstration is now a reality.  The pre-claim demonstration period will begin this year for some states and early next year for others.  The five states that are directly affected by this demonstration includes: Illinois, Florida, Massachusetts, Michigan and Texas.


The timeline for the pre-claim review is as follows, with CMS noting that the demonstration period cannot begin earlier the following dates:

  • August 1, 2016: Illinois (Palmetto)
  • October 1, 2016: Florida (Palmetto)
  • December 1, 2016: Texas (Palmetto)
  • January 1, 2017: Michigan and Massachusetts (NGS)


A pre-claim review is a ‘process through which a request for provisional affirmation of coverage is submitted for review before a final claim is submitted for payment’.  Essentially, you begin to treat the patient, gather the necessary clinical documentation and submit to your intermediary for review.  Once reviewed by the intermediary, you will receive an approval or denial that allows you to bill for an entire episode of care.


One big differentiation needs to be drawn between a pre-claim review and a prior authorization which some insurances require.  Agencies are allowed to accept, open and begin treating the patient.  Agencies are expected to submit a RAP as they normally would as well. After a RAP is submitted, the necessary documentation that is required to be submitted your intermediary is sent.


The exact documentation required, how to submit and where to submit is still being ironed out between CMS and the intermediaries.  CMS has stated that agencies will be allowed to mail, fax and upload through the intermediary’s secure portal.  However, as of publishing this edition, NGS and Palmetto have yet to even include any information regarding pre-claim review on their websites.


Agencies who submit documentation and request for a pre-claim review can expect, according to CMS, a response within 10 days for an initial request.  If that initial request is denied for lack of information or confirmed medical necessity, CMS has stated that this appeal could take up to 20 days to process.  An agency is going to be allowed to appeal an unfavorable decision as many times as necessary.  Don’t back down – keep sending the information over and over again until you get a decision.


Likely, many agencies are going to experience this appeal process many times over because we know that this demonstration is going to turn into a giant mess.  The intermediaries are not going to be able to keep up with the demand.  Palmetto being the largest intermediary in the country and servicing Illinois, Florida and Texas will likely buckle under pressure once this takes effect and all three states are active.   NGS is going to have the longest period to get ready and handles a much lower volume of claims being the smallest intermediary.

Submitted documentation will be tracked with a serial number.  This tracking number is going to be very important and must be retained, along with the approval (affirmation) notice received from the intermediary.  Final claims will need to have this serial tracking number included.  If the serial number is not included, the final claim could be denied and the RAP recouped.


For agencies who go rogue and decide that they do not want to comply, expect a 25% cut to your reimbursement.  You either play or pay – its CMS’ rules not yours and as a government contractor, you are expected to comply with the government’s payment terms.


Also don’t assume that just because your agency does have most if not all pre-claim requests approved that you are immune from ADRs (additional documentation requests), RAC audits, or a ZPIC audit.  In fact, the information that you submit could greatly help RAC auditors, ZPIC auditors and the OIG investigate your agency.


The five states were selected due to the high volume of home health usage and historical fraud that has occurred.  While most agencies are not perpetuating fraud and abuse, the few agencies that have done so are leaving yet another black mark on the reputation of compliant providers.


As with the introduction of Face to Face (F2F) a few years ago, we can expect this new compliance measure to force out struggling agencies.  The agencies with less than 50 patients are going to be the most effected as cash flow is going to be severely hampered. Even larger agencies who have a significant portion of Medicare patients could feel the effects of slower cash flow and billing issues.


Medicare Advantage plans, similar to their requirement for a F2F, could also jump on the pre-claim review request band wagon.  If there is an opportunity to put the responsibility of care on a provider and pay for that care rather than the insurance company, the chances are growing that you will see another step in receiving that authorization.


Time will tell, but we are going to be updating Home Health Today with more information as it comes out from NGS and Palmetto.  As each intermediary operates differently from one another with documentation standards and policies, information from both will be compiled and shared.  Agencies with a strong focus on compliance will not likely face too much trouble with this new requirement other than the nuisance all agencies effected will face with tracking and submission of documents.  However, many agencies still do not have sufficient documentation and do not do well when undergoing clinical reviews.  These agencies who have shaky documentation should invest in training, mock reviews and a strong compliance program that enforced will all staff from the office to the clinicians providing patient care.