Prior Authorizations – Not Just for Commercial Insurance Anymore

Ready for the next step in healthcare evolution? We know there is a lot to handle all at once, but for 5 states, the changes keep on coming.


CMS has published a proposed a new pilot program to introduce prior authorizations to Medicare Part A beneficiaries who wish to receive home health.  How the system will work is not totally clear.  But if you have ever had to use your Intermediary’s web portal to check on claims or current benefits, then you know a likely headache is coming, compliments of CMS.


The five states that are going to be subject to the proposed pilot are: Florida (we know – shocking!) Illinois, Massachusetts, Michigan and Texas.  What do all of these five states have in common though?  Very high utilization of home health services and in many cases – high potential for fraudulent activities.


We know Florida and Texas are high on the list due to the highly concentrated tasks forces and moratoriums in place.  The other three states aren’t nearly as bad but Chicago, Detroit and Greater Boston have all had their own significant issues with home health in the past year, so while it isn’t apparent on the surface, digging a little deeper does unlock some very disturbing trends in utilization.


CMS has offered some information and insight – but not much on the proposed pilot.  Agencies will be required to provide information to their intermediary prior to payment. The intermediary will then decide before paying an agency for services, what the appropriate amount should be.     On the back end, data collection will be taking place and analytics used to capture any potential trends.  The data measures analyzed will be: referring provider, service summary of the provider (aka high utilization agencies who seem to be doing more therapy than the Betty Ford Center in California will likely be monitored), and a review of the actual patient to see if prior services warrant the potential use of home health in the overall treatment process.


While this sounds great to catch providers that are not necessarily following guidelines, it could hurt many honest providers who are actually providing legitimate care. Agencies that do have higher than average reimbursement or higher than expected therapy utilization will likely be on the watch list.  Time will tell on the overall outcome of the pilot program, but agencies in the 5 states should be ready for the coming pilot, which would run concurrently with the new proposed payment model of pay for performance in a few states.