Home Health Industry Can’t Fight CMS’ New Pre-Claim Review Initiative

To combat improper billing, the Centers for Medicare & Medicaid Services (CMS) in 2016 rolled out the controversial pre-claim review demonstration in Illinois, an initiative that required home health providers to send in their claims earlier in the care process. With the help of Congress, however, stakeholders were able to seemingly stop pre-claim review dead in its tracks.

CMS unexpectedly revived the initiative with some tweaks this summer. But the industry likely won’t be able to defeat the new version of pre-claim review, policy experts warn.

“I don’t know how much we can fight this at this juncture,” Mary Carr, vice president of regulatory affairs for the National Association of Home Care & Hospice (NAHC), said Oct. 9 while presenting at the organization’s annual leadership conference in Grapevine, Texas. “The chips will fall where they may.”


CMS’ new version of pre-claim review — now called the review choice demonstration — allows home health agencies to forgo prior claims authorization in favor of post-payment review. In post-payment review, providers would affirm claims after they had already received payment, giving CMS the opportunity to rescind funds if any issues are uncovered.

The proposal additionally allows home health providers to opt out of prior and post-payment review and instead take a 25% reduction on all payments for claims submitted. Providers that achieve a targeted claim approval rate can choose to opt out of claim reviews in favor of a spot check to ensure continued compliance.

The latest update with the new version of pre-claim review from CMS is that it — if implemented — will go into effect in Illinois on Dec. 10, 2018.


Stakeholders can currently comment on the initiative during a 30-day comment window that closes at the end of the month.

An April report from the Government Accountability Office (GAO) that highlighted savings from the 2016 initiative was a decisive blow to the industry’s battle against pre-claim review, according to Carr. Estimated savings from the original implementation through March 2017 could have been as high as $1.9 billion, the watchdog entity found.

“That GAO report was a killer,” Carr told Home Health Care News in an interview following her presentation. “It showed significant savings.”

While savings to the Medicare program is a positive outcome from CMS’ standpoint, the push to revive pre-claim review in its proposed form is misguided because it lacks insight gained during the original version, Carr said, adding that smaller agencies are the providers that suffer the most under the initiative.

“There’s got to be some sort of pattern that the data shows where you can target this a little more accurately than just doing this baby-out-with-the-bathwater type of approach,” she said. “We still see that a targeted approach is the appropriate way to go. From what we understand, [CMS] never even analyzed the data they got from pre-claim review.”

Viable alternatives to pre-claim review readily exist that are far less costly and  burdensome with potentially more effectiveness, Carr said, adding that NAHC still plans to push back on pre-claim, as it did in the past, despite the somewhat less-promising outlook.

One positive in the new iteration, according to Carr, is that providers in Illinois with a history of hitting affirmation targets of 90% would likely be able to skip post- or pre-claim review. In those cases, they would likely be able to immediately jump into the spot-check option, she said.

“If you proved, through the last pre-claim review, that you had this 90% affirmation rate, then you don’t necessarily have to go through 100% review,” Carr said. “You might be able to check in to one of these more random reviews or other options.”

After Illinois, the new pre-claim review version is planned for Texas, Ohio and North Carolina.

While the industry is largely against pre-claim review, improper payments are currently up, according to Carr.

CMS has maintained that its new version of pre-claim review would not add an unreasonable amount of administrative burden to home health agencies in targeted states.

More than two dozen members of Congress sent a letter to CMS Administrator Seema Verma in September calling for more clarification on — and voicing concern about — the revived pre-claim review initiative.

Written by Robert Holly