Home Health Ready to Fight Pre-Claim Review’s Dreaded Return

Stakeholders throughout the home health industry are gearing up for another battle over Pre-Claim Review Demonstration (PCRD), a controversial Centers for Medicare & Medicaid Services (CMS) initiative aimed at reducing fraud and improper billing. PCRD asks providers to send in claims earlier in the care process to ensure they are meeting requirements.

In August 2016, CMS rolled out the demonstration in Illinois, with plans to further implement it in four other states: Florida, Texas, Michigan and Massachusetts. After significant outcry from the industry and a messy start to the program, the agency nixed the plan to spread the demonstration beyond Illinois and paused the program indefinitely in April of last year.

On Tuesday, CMS announced it is seeking public input on a new proposal to bring back PCRD, to the chagrin of home health care stakeholders.


“We are not excited at all about the resurgence of the Pre-Claim Review Demonstration,” Joy Cameron, vice president of policy and innovation for ElevatingHOME, told Home Health Care News. “This would hurt access and people’s ability to get care. Our members are not at all happy about this.”

Key differences in CMS’ new proposal 

So far, CMS’ new proposal contains at least one major difference from the original PCRD program.


Unlike PCRD’s initial roll out in Illinois, the new version allows home health agencies to forgo prior authorization in favor of post-payment review. In theory, this will increase administrative flexibility and minimize financial uncertainty for providers. In general, post-payment review would work by having providers affirm claims after they had already received payment, giving CMS the opportunity to rescind funds if any issues are found during review.

While having another option is an improvement over the original model, post-payment review can only alleviate so much burden and may actually lead to new problems, Bill Dombi, president of the National Association for Home Care & Hospice (NAHC), told HHCN.

“To some extent, [the proposal] has some positives, but those positive are very limited,” Dombi said. “We’ve seen in post-pay reviews that there’s this burden of 20-20 hindsight, where you bring in a patient into service for restorative therapy, and then the patient doesn’t gain function to the extent you’d hoped. Hindsight could lead you to end up with someone at the Medicare contractor saying it wasn’t necessary, obviously, because it didn’t work.”

Similar to the old model, the proposal allows home health providers to completely opt out of prior and post-payment review and take a 25% reduction on all payments for claims submitted. Doing so may expose them to review by Recovery Audit Contractors, according to CMS.

Once a provider reaches a targeted affirmation or claim approval rate, it can choose to be relieved from claim reviews, except for a spot check to ensure continued compliance.

The new proposal once again targets Illinois, Florida and Texas, along with Ohio and North Carolina, but it is not yet clear if a potential pre-claim review program would go into effect simultaneously in those states or be phased in gradually.

“While we continue to work every day on finding ways to reduce administrative burden, we also recognize the equally important responsibility to protect taxpayers,” CMS Administrator Seema Verma said in a statement. “To that end, we’re seeking comment form the public and interested stakeholders for the revised demonstration, as part of the Paperwork Reduction Act approval process.”

Industry ready to push back

Providers, lawmakers and other stakeholders were successful in delaying implementation and further spread of PCRD after putting pressure on CMS while it was ongoing in Illinois. Industry policy exerts and advocates are already preparing to fight the proposal.

“We are going to renew our advocacy efforts,” Cameron said. “We worked hard as an industry to push it back last time, and I think our friends in Congress will be very disappointed to hear this has come back, especially since we have been working diligently to bring down that improper payment rate.”

When pre-claim review was first rolled out in 2016, CMS did so without providing an opportunity for public comment, a move NAHC criticized and considered arguing against, Dombi said. This time, home health providers will be given a chance to express their concerns, though they’re not guaranteed to be heard by CMS, he said.

NAHC planned to file a lawsuit to block PCRD in 2016.

The public comment window on the new proposal will be open for 60 days.

“They learned the lesson obviously from the last go around not to give us another shot at a legal challenge,” Dombi said. “At the same time, we can only hope that CMS will take the public comment period seriously.”

A nightmare return

Sources told HHCN that more information on the proposal is likely to be publicly released on Thursday. Until then, several questions remain, including what happens to the home health providers in Illinois who already worked to meet affirmation rate targets back in 2016.

“After a few months of doing it, some of our agencies were getting a 100% affirmation rate or in the 90% range,” Sara Ratcliffe, executive director of the Illinois HomeCare and Hospice Council (IHHC), told HHCN. “So they want to know, will that be taken into consideration if this round goes through, or will they have to go through the painful process all over again?”

The initial implementation of pre-claim review in Illinois was riddled with inconsistencies and confusion, Ratcliffe said.

Palmetto, a Medicare Administrative Contractor (MAC) that reviews claims for Medicare, experienced issues with reviewer training as well, she said. To help work through those challenges, IHHC met with its members organizations and NAHC every Thursday for 22 weeks straight.

“It was just a nightmare at the beginning,” Ratcliffe said. “We were cautiously optimistic that [pre-claim review] would stay dormant for a long while, but it was always kind of in the back of our minds.”

NAHC is currently evaluating the new proposal and analyzing data from the earlier iteration in Illinois with a particular emphasis on patient impact, Dombi said. It also plans to work with CMS to explore other ways at reducing improper billing, such as easing face-to-face physician requirements for home health services.

Written by Robert Holly

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