LHC Group, Amedisys Execs Shrug Off Pre-Claim Proposal

The home health care industry was rocked when the Centers for Medicare & Medicaid Services (CMS) announced it was bringing back the pre-claim review demonstration at the end of May.

The agency proposed reviving the model in the wake of a report urging more pre-claim, or prior authorization, demonstrations across the health care space from the Government Accountability Office.

Pre-claim, which was rolled out in Illinois in 2016 as a demonstration that requires providers to submit claims earlier in the care process for affirmation, was put on pause indefinitely in 2017 just before it was due to be implemented in Florida.


Upon news of the proposal, several industry stakeholders spoke out against the pre-claim review, but other home health care providers are singing a different tune.

LHC Group (Nasdaq: LHCG) CEO Keith Myers, in particular, doesn’t see pre-claim review as a significant threat to the company if it is implemented again.

“In our first round, we had to build the system and get people trained for it, but [we] had a 95% accuracy rate,” Myers said of submitted claims at the Jefferies 2018 Global Healthcare Conference in New York. “In the new rule, if you’re 90% or better you get a free pass as long as you stay above that.”


While the regulation will require changes to the business, Myers is confident in LHC Group’s ability to tackle it head-on.

“For LHC, it’s another process we have to put in place,” Myers said. “We’re very much a process-driven company. If you throw a reg at us, if anyone, we can comply with it. We will comply and measure it.”

Similarly, Amedisys (Nasdaq: AMED) CEO Paul Kusserow isn’t fazed by the proposal coming back, largely as a result of the company’s success during the pilot in Illinois. Amedisys had a “96% pass rate” in Illinois, Kusserow said at Jefferies on Tuesday.

“We had been through [pre-claim review- two years ago,” Kusserow said. “We found it was relatively ineffective … but we took it seriously and performed very well in it.”

Kusserow also called pre-claim “inconsequential.”

The proposal, which would roll out pre-claim review as a demonstration in Illinois, Ohio, North Carolina, Florida and Texas, only affects about 6% of Amedisys’ home health care business,

“We’re very well prepared for this in Florida,” Kusserow said. “We’re fundamentally doing this right now.”

Written by Amy Baxter

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