CMS Floats Home Health Prior Authorization Requirement

The home health industry could be bracing for another measure to combat fraud and abuse in a proposed pilot that would require preauthorization before seeing patients.

The Centers for Medicare & Medicaid Services (CMS) quietly announced it is seeking approval for a Medicare Probable Fraud Measurement Pilot in five states.

“The probably fraud measurement pilot would establish a baseline of probable fraud in payments for home health care services in the fee-for-service Medicare program,” a notice from CMS reads. “CMS and its agents will collect information from home health agencies, the referring physicians and Medicare beneficiaries selected in a national random sample of home health claims.”

Under the program, home health agencies would be required to perform prior authorization before processing claims for services. The procedure would be similar to the Prior Authorization of Power Mobility Device (PMD) Demonstration, which CMS implemented in 2012 and requires prior authorization for scooters and power wheelchairs within seven states with high population of fraud- and error-prone providers. The domestication would also take lead from other prior authorization processes such as TRICARE, private insurance health care programs and certain state Medicaid programs, according to CMS.

“This demonstration would help assure that payments for home health services are appropriate before the claims are paid, thereby preventing fraud, waste and abuse,” the notice argues.

The home health demonstration is proposing to pilot in Florida, Texas, Illinois, Michigan and Massachusetts.

The National Association for Home Care & Hospice (NAHC) has already taken a soft stance on the measure, stating on its website the association will likely oppose the proposed program “as the antifraud enforcement efforts are already well targeted.” NAHC also wrote that prior authorization would likely increase administration costs for home health agencies.

Amid a health care climate that continues to shift away from fee-for-service to value-based purchasing, home health agencies may already be feeling the sting of rising Medicare anti-fraud efforts.

“CMS is now proposing that we, home health providers, need to get a reauthorization or an authorization before we see the patients, which is going to kill a lot of the businesses out there, including us,” Marvin Javellana, CEO of Illinois-based Better Care Home Health Inc., told Senior Housing News. “It’s going to affect us… Fraud and abuse is killing us. CMS is instituting all these stricter measures to make sure that we are regulated properly and we get rid of fraud and abuse. If we, home health agencies, are doing the right thing, there will be no need for CMS to clamp down on us.”

While the initiative is only in the proposal phase at the moment, an open public comment period will run until April 5, 2016. While NAHC plans to submit comments on behalf of its industry members, agencies may already be taking action to guard against increasing regulations and CMS requirements.

“Diversifying is one of the things that we are doing to prepare for this,” Javellana told SHN. “We are not necessarily dependent on Medicare patients. That’s one way of protecting your business.”

Written by Amy Baxter