[Updated] Agencies Slam ‘Misleading’ Data on Illinois Pre-Claim

While providers in Illinois have been reporting numerous problems and sky-high non-affirmation rates for claims submitted under the Pre-Claim Review Demonstration, the Centers for Medicare & Medicaid Services (CMS) recently released data that appears to characterize the program as proceeding smoothly.

In fact, the data seem so optimistic, it’s hard for many to believe it tells the whole story of how the demonstration is rolling out in the Prairie State, and others called it flat out “misleading.” The data comes after the agency delayed implementing the demonstration in four other states—Florida, Texas, Massachusetts and Michigan—and lawmakers have attempted to delay the program by a year. PCRD has been ongoing in Illinois since August 3.

A Rosy Picture


Illinois home health agencies have reported high rejection rates for their submissions in addition to inconsistent reasons for non-affirmations. However, over the eight weeks that the demonstration has been ongoing in Illinois, 66% of pre-claim review requests were either provisionally afforded or partially affirmed, according to CMS.

The agency also said that the time it takes to submit documents dropped during the timeframe, from 12 minutes to 9 minutes, on average. Others disagree.

“The CMS data is highly misleading,” a review of the data from the National Association for Home Care & Hospice (NAHC) reads. “It does not include the extensive time needed to collect the documentation for submission, nor does it include the time is takes to review all that documentation for compliance. While CMS is correct in stating that HHAs have the responsibility to collect this documentation, its assemblage, review and submission is a new requirement under the demonstration project.”


Other reports, including a video of a HHA going through the process online, reveal submitting claims can take up to one hour rather than a few minutes. One Michigan-based home health care provider with a presence in Illinois, Residential Home Health, says submissions take roughly 45 minutes to hour.

“That’s a gross misrepresentation of all the pre-work that has to happen to organize everything in the documentation,” David Curtis, president of Residential Home Health, told Home Health Care News, speaking of the CMS data. “It’s like saying it only took two minutes to sign a tax return and put a stamp on it. But how long did it take to prepare the filing?”

CMS officials say the data shows an average, and the numbers may not represent what some home health agencies are experiencing.

“Because this is summary or average data, it will not reflect the experience of all home health agencies,” a CMS official told HHCN via email. “For example, an HHA that is having trouble complying with Medicare’s coverage and billing rules may experience much higher non-affirm rate.”

CMS also noted in the data that 99% of claims are returned with a response within the required timeframe. What the data doesn’t account for is the number of claims that home health agencies are holding back in order “to determine the outcome of a sample of their claims,” according to NAHC. In other words, the estimated 50,000 submitted pre-claims submitted to CMS thus far is only a fraction of what home health agencies will submit.

“That means that CMS has yet to come close to seeing the workload level that actually exists,” NAHC’s response reads.

Similarly, Residential Home Health has only submitted about 25% of its claims, according to Curtis.

“And I hear that is productive compared to my colleagues,” he said.

Another Illinois-based home health care agency, Better Care Home Health, has also withheld submitting all its pre-claims.

“We home health agencies have only submitted a fraction of our pre-claims,” Marvin Javallana, CEO and founder of the company, told HHCN. “We’re trying to learn, too. We’ve definitely submitted just a fraction of it.”

A Barrier to Care

Furthermore, NAHC disagrees with the affirmation rate CMS noted—66%—because this figure includes partial affirmations. In those cases, agencies will still have to resubmit the documentation for a full affirmation, which means the rejection rate is likely higher than 34%. Partial affirmations also increase administrative work and costs for agencies.

“The rejection rate is also higher than the reported 34%,” according to NAHC. “…A ‘partial affirmation’ is a partial denial. The financial impact of partial affirmations can be significant.”

Another industry group, the Illinois HomeCare & Hospice Council, agrees that the data may be misleading, or at least differ from what home health agencies are experiencing.

“We are in total agreement with NAHC’s response,” Sara Ratcliffe, executive director of the council, told HHCN. “We had reported to our Congressional delegation that what we were hearing was that the non-affirmation rate was between 60% and 80%. CMS looks at the number in a different way—they were taking into consideration partial affirmation as affirmations. But, if something is partially affirmed, it is partially non-affirmed. We count those as non-affirmations.”

While CMS points out that this 34% rejection rate is much lower than the national improper payment rate reported in 2015—59%—it’s too costly not to reimburse 34% of care, NAHC argues. Patients may be the ones to pay the price as home health agencies wait for their pre-claims to be affirmed or resubmitted.

“Medicare beneficiaries cannot withstand a 34% rejection rate,” the NAHC response says. “PCR is a direct barrier to care access.”

What’s worse is that the comparison to the national improper payment rate may not even be appropriate, like comparing the “proverbial apples to oranges,” according to NAHC.

And even if the pre-claim rejection rate were true, that still means many patients could be harmed in the delayed process.

“Even if the numbers are true, 34% rejection rate is still not good,” Ratcliffe said. “That’s one-third of business being denied. That’s not sustainable. What I would hope is that they delay this.”

Overall, the CMS data release is adding to the mounting frustration that providers are feeling with regard to pre-claim.

“It’s not in touch with reality,” Curtis said. “The most frustrating thing is that I don’t see how applying this financial and operational burden, and by applying the regulations to all providers, reduces fraud. It’s diverting resources that would otherwise go to patient care. If it needs to be put off in the other four states, what’s so special about Illinois to continue this burdensome regulation and cut off patient access to home care services?”

Reasons for Non-Affirmation 

In addition to affirmation and non-affirmation rates, CMS provided data on the top four reasons for non-affirmation.

“There no consistency to non-affirmed reasons, and they give you compounded reasons,” Curtis told HHCN. “They aren’t consistent. This review process, particularly with face-to-face, is so subjective. The inter-rater reliability is not high.”

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The “compounded reasons” refers to the fact that many claims have more than one reason for non-affirmation—and sometimes all four reasons are listed. As a result, the data on reasons for non-affirmation may be less than helpful to home health agencies.

Furthermore, the data is not consistent with reports that “insufficient documentation” has resulted in a 94.8% error rate, according to NAHC.

“There’s a lot of confusion out there,” Ratcliffe said of the inconsistency. “I think the Palmetto reviewers are confused and what they are saying to providers is confusing.”

However, over the eight weeks the demonstration has been underway, Curtis says the responsiveness of CMS and the Medicare Administrative Contractors (MACs) has improved. Yet, they are not perfect by any stretch.

One issue has to do with the ability of MAC auditors to cite specific regulations in educational calls with providers, according to one administrator.

“When questioned specifically about the language within the CMS policies as to why a certain physician encounter or signed Plan of Care does not meet the requirements, several of the reviewers are unable to reference the exact policy and have quoted responses such as ‘based on how we were trained’ or ‘that is not my understanding,’ instead of a discussion and reference about the specific written regulations within Medicare policies,” said Nate Johnson, an administrator with Health Resource Solutions, an Illinois-based nursing and therapy agency.

CMS has said the agency is working with MACs to improve responsiveness, even proactively talking with agencies in Illinois that are experiencing especially high non-affirmation rates.

“CMS has directed the MACs to provide additional outreach and education to HHAs, including special outreach to HHAs with particularly low affirmation rates,” a CMS official said in an email. “This outreach includes proactive phone calls to the HHAs to walk through individual cases and help them understand why a particular case was non-affirmed and what they can do to get it affirmed.”

Several agencies have expressed that the physician signature requirement is one of the biggest challenges of the PCRD, and some agencies feel physicians should be more involved.

“The homebound rejection and the face-to-face rejection could significantly be reduced if we educate the physicians or the physicians have skin in the game,” Javellana said. “It doesn’t affect them. I feel that that’s a big factor. Why is the burden all on us at this moment?”

While CMS has pledged to better educate all health care providers about their responsibilities in the demonstration, only home health agencies will be penalized at this point.

“[CMS] has sent the physician’s letters, and that’s the extent of their education,” Javellana said. “We’re going out there now to try to educate the physicians. We’re taking that challenge ourselves.”

Residential Home Health’s Curtis is sympathetic to the huge task faced by the auditors, but thinks there are fundamental problems with some of the expectations related to pre-claim, particularly the physician signature hurdle.

“Everyone is trying to be more responsive and live up to the expectations of CMS,” Curtis said. “But the challenge is that in order to get paid by Medicare, Palmetto is asking us to submit the OASIS admission visit and therapy evals with all that paperwork signed by the certifying physician. That’s absolutely a new requirement. It’s out of the regs. It’s the biggest head scratcher I’ve seen in 15 years in the industry.”

As more data comes in, CMS plans to make it available.

“CMS is always looking for new and better ways to display the data and welcomes all suggestions,” CMS said. “Interested parties that wish to submit a suggested data format may do so by sending an email to [email protected].”

Written by Amy Baxter

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