[Federal Register Volume 81, Number 112 (Friday, June 10, 2016)]
[Notices]
[Pages 37598-37600]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-13755]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-6069-N]


Medicare Program; Pre-Claim Review Demonstration for Home Health 
Services

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Notice.

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SUMMARY: This notice announces a 3-year Medicare pre-claim review 
demonstration for home health services in the states of Illinois, 
Florida, Texas, Michigan, and Massachusetts where there have been high 
incidences of fraud and improper payments for these services.

DATES: This demonstration will begin in Illinois no earlier than August 
1, 2016, in Florida no earlier than October 1, 2016, and in Texas no 
earlier than December 1, 2016. The demonstration will begin in Michigan 
and Massachusetts no earlier than January 1, 2017.

FOR FURTHER INFORMATION CONTACT: Jennifer McMullen, (410) 786-7635.
    Questions regarding the Medicare Pre-Claim Review Demonstration for 
Home Health Services should be sent to [email protected].

SUPPLEMENTARY INFORMATION:

I. Background and Legislative Authority

    Section 402(a)(1)(J) of the Social Security Amendments of 1967 (42 
U.S.C. 1395b-1(a)(1)(J)) authorizes the Secretary to develop 
demonstration projects that ``develop or demonstrate improved methods 
for the investigation and prosecution of fraud in the provision of care 
or services under the health programs established by the Social 
Security Act'' (the Act). According to this authority, we will 
implement a Medicare demonstration that establishes a pre-claim review 
process for home health agencies (HHAs) to assist in developing 
improved procedures for the identification, investigation, and 
prosecution of Medicare fraud occurring among HHAs providing services 
to Medicare beneficiaries. The proposed demonstration will begin in 
Illinois not earlier than August 1, 2016, will begin in Florida not 
earlier than October 1, 2016, and will begin in Texas not earlier than 
December 1, 2016. The demonstration will begin in Michigan and 
Massachusetts not earlier than January 1, 2017. Providers in each state 
will be notified by the appropriate Medicare Administrative Contractor 
prior to the start of the demonstration in the state. Additionally, CMS 
will utilize other educational efforts to announce the program to 
stakeholders.
    This demonstration will evaluate an additional method that may 
assist with the investigation and prosecution of fraud in order to 
protect the Medicare Trust Funds from fraudulent actions and improper 
payments. We believe this demonstration will bolster the efforts that 
CMS and its partners have taken in implementing a series of anti-fraud 
initiatives in these states and will provide valuable data that CMS 
working with its law enforcement partners, can use to combat the 
submission of fraudulent claims to the Medicare program. One such anti-
fraud initiative is the use of temporary moratoria on the enrollment of 
new home health providers that were put in place in the Miami and 
Chicago that and were subsequently expanded to the Fort Lauderdale, 
Detroit, Dallas, and Houston metropolitan areas. These temporary 
moratoria prohibit the new enrollment of home health providers to help 
CMS prevent and combat fraud, waste, and abuse in these locations.
    We also believe the data collected from this demonstration will 
assist with a second initiative, the Health Care Fraud Prevention and 
Enforcement Action Team (HEAT) Task Force, created by the Department of 
Health and Human Services and the Department of Justice (DOJ), and the 
Heat Task Force's ongoing fight against Medicare fraud. The HEAT Task 
Force uses resources across the government to help prevent and stop 
fraud, waste, and abuse in the Medicare and Medicaid programs. Since 
2007, the HEAT Task Force of the DOJ has charged more than 2,300 
defendants with defrauding Medicare of more than $7 billion and 
convicted approximately 1,800 defendants of felony health care fraud 
offenses. In addition, the data resulting from this demonstration could 
provide investigators and law enforcement with important information to 
determine how to focus their investigation activities to identify and 
combat home health fraud, and in so doing, protect the Medicare Trust 
Funds from fraudulent actions and improper payments.
    This demonstration may also help prevent improper payments in 
geographic areas where HHA providers are known to have a high incidence 
of fraud. The improper payment rate for HHA claims has been increasing 
over the past several years, and fraud is one factor contributing to 
the increase. It is important to note that while all payments made as a 
result of fraud are considered ``improper payments,'' not all improper 
payments constitute fraud. CMS' Comprehensive Error Rate Testing (CERT) 
program, which measures Medicare's improper payment rate, estimates the 
payments that did not meet Medicare coverage, coding, and billing 
rules. The fiscal year (FY) 2015 Department of Health and Human 
Services Agency Financial Report reported that the CERT program's 
calculated 2015 improper payment rate for HHA claims increased to 59.0 
percent from the 2014 rate of 51.4 percent and the 2013 rate of 17.3 
percent. The increase in the 2015 improper payment rate was primarily 
due to ``insufficient documentation'' errors, specifically, 
insufficient documentation to support the medical necessity of the 
services. Similar documentation errors have also occurred in previous 
years. For example, the 2014 CERT report found that the majority of 
home health payment errors occurred when the narrative portion of the 
face-to-face encounter documentation did not sufficiently describe how 
the clinical findings from the encounter supported the beneficiary's 
homebound status and need for skilled services.
    Due to the substantial increase in improper payments and concerns 
raised by the home health industry, relating to implementation of the 
face-to-face encounter documentation requirement, we made Medicare HHA 
payment policy changes in an effort to simplify the face-to-face 
encounter regulations. Specifically, as of January 1, 2015, a separate 
narrative is no longer required as part of the face-to-face 
documentation. Rather, the certifying physician's or the acute/post-
acute care facility's medical record(s) for the patient must contain 
sufficient documentation to substantiate eligibility for home health 
services.
    Despite these recent changes, we continue to see cases in which the 
medical record does not support eligibility for the home health 
benefit, which constitute ``insufficient documentation'' errors. 
Moreover, we note that the recent regulatory changes do not address HHA 
errors in home health billing other than those related to the face-to-
face narrative requirement.

[[Page 37599]]

Therefore, we also plan to use this demonstration to help make sure 
that all coverage and clinical documentation requirements are met 
before claims are submitted for final payment.
    We also believe that this demonstration will enable us to--(1) test 
the level of resources needed to implement a permanent pre-claim review 
program for home health services; (2) determine the feasibility of 
performing pre-claim reviews to prevent payment for services that have 
historically had a high incidence of fraud; and (3) determine the 
return on investment of pre-claim review for home health claims. This 
demonstration will support our program integrity strategy of moving 
beyond a reactive ``pay and chase'' method toward a more effective, 
proactive strategy that identifies potential improper payments before 
payments are made. We will analyze data from the home health services 
pre-claim review demonstration to evaluate the impact on fraud in the 
demonstration states, which we believe will help assist in developing 
improved procedures for the identification, investigation, and 
prosecution of Medicare fraud occurring among HHAs providing services 
to Medicare beneficiaries and may consider if a more focused, risk 
based approach to pre-claim review is warranted in the future.
    The pre-claim review demonstration does not create new 
documentation requirements, but simply requires currently mandated 
documentation earlier in the claims payment process. In addition, there 
are no changes to the home health service benefit for Medicare fee-for 
service beneficiaries.

II. Provisions of the Notice

    This demonstration will implement a 3-year pre-claim review process 
for home health services in Illinois, Florida, Texas, Michigan, and 
Massachusetts. Prior to and during the demonstration, we will conduct 
outreach to and education of home health providers and Medicare 
beneficiaries using media such as webinars, open door forums, 
frequently asked questions pages on our Web site, other Web site 
postings, and educational materials issued by the Medicare 
Administrative Contractors (MACs) to provide guidance on the pre-claim 
review process. Additional information about the implementation of the 
pre-claim review demonstration will be available on the CMS Web site 
at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Overview.html. 
Questions regarding the Medicare Pre-Claim Review Demonstration for 
Home Health Services should be sent to [email protected]. 
Under this demonstration, a HHA provider, the entity billing on behalf 
of the HHA, or the beneficiary (known as the ``submitter'') will be 
encouraged to submit to the relevant MAC a request for pre-claim 
review, along with all relevant documentation to support Medicare 
coverage of the applicable home health level of service. After receipt 
of all relevant documentation, the MAC will review the pre-claim review 
request to determine whether the service level complies with applicable 
Medicare coverage and clinical documentation requirements. The HHA 
provider should submit the Request for Anticipated Payment (RAP) before 
submitting the pre-claim review request and begin providing services 
while waiting for the decision from the MAC.
    The MAC will communicate to the HHA and beneficiary a decision 
provisionally approving (or disapproving) payment after a submission of 
a request for pre-claim review. For the initial submission of a pre-
claim review request, the MAC will make all reasonable efforts to make 
a determination and issue a notice of the decision within 10 business 
days.
    If the MAC declines payment after review, the submitter may amend 
and resubmit it. A pre-claim review request may be resubmitted an 
unlimited number of times. For subsequent pre-claim review requests, 
CMS or its agents will conduct a complex medical review and make all 
reasonable efforts to postmark and notify the HHA and the beneficiary 
of its decision within 20 business days. These timeframes are 
consistent with the Prior Authorization of Power Mobility Devices 
(PMDs) Demonstration. Meeting these timeframes will be part of the 
contract performance metrics for the MACs that are involved in this 
demonstration at the time their contracts are modified to incorporate 
the demonstration's work requirements (as well as the necessary 
funding).
    If an applicable claim is submitted for payment without a pre-claim 
review decision, it will be stopped for prepayment review and 
documentation will be requested. After the first 3 months of the 
demonstration in a particular state, we will apply a payment reduction 
for claims that, after such prepayment review, are deemed payable, but 
did not first receive a pre-claim review decision. As evidence of 
compliance, the HHA must submit the pre-claim review number on the 
claim in order to avoid a 25-percent payment reduction. The 25-percent 
payment reduction cannot be recouped from or otherwise charged to the 
beneficiary, and is not subject to appeal. The beneficiary would not be 
liable for more than he or she would otherwise be if the demonstration 
were not in place.
    The following explains the various pre-claim review scenarios:
    In each of the following scenarios, the HHA would conduct all 
required assessments, submit the RAP, and begin services for the 
beneficiaries.
     Scenario 1: When a submitter submits a pre-claim review 
request to the MAC with appropriate documentation, and all relevant 
Medicare coverage and documentation requirements are met for the home 
health service, the MAC will send a provisional affirmative pre-claim 
review decision to the HHA and the Medicare beneficiary. When the HHA 
submits the claim for payment to the MAC after delivering the home 
health level of service(s), the claim will include a unique tracking 
number that indicates it has been affirmed for pre-claim review and, as 
long as all Medicare coverage and documentation requirements continue 
to be met, the claim is paid.
     Scenario 2: When a submitter submits a pre-claim review 
request with documentation that does not meet all relevant Medicare 
coverage and clinical documentation requirements for the home health 
level of service, notification of a non-affirmative decision will be 
sent to the HHA and the beneficiary advising them that Medicare will 
not pay for the service. The submitter may then resubmit the request 
with additional documentation to support that the Medicare requirements 
have been met. Alternatively, the HHA could submit the claim to the 
MAC, at which point the MAC would deny the claim for lack of a 
provisional affirmative pre-claim review decision and recoup the 
payment made on the RAP following their standard procedures. Upon 
receiving the claim denial by the MAC, the HHA or the beneficiary would 
have the opportunity to appeal the claim denial if they believe 
Medicare coverage was denied inappropriately. Beneficiaries will 
continue to have the option of signing an Advance Beneficiary Notice of 
Noncoverage (ABN) in order to receive the services and be liable for 
payment.
     Scenario 3: When a submitter submits a pre-claim review 
request with incomplete documentation, the request, along with a 
detailed decision letter explaining what information is missing, is 
sent back to the submitter for resubmission. Both the HHA and the 
beneficiary are notified and the

[[Page 37600]]

submitter can resubmit the request with appropriate supporting 
documentation.
     Scenario 4: When the HHA provides the treatment to the 
beneficiary and submits the claim to the MAC for payment without 
submitting a pre-claim review request, the home health claim will be 
stopped for prepayment review and documentation will be requested. If 
the claim is determined to be not medically necessary or not 
sufficiently documented, the claim will be denied and all current 
policies and procedures regarding liability for payment will apply. The 
HHA, the beneficiary, or both can appeal the claim denial if they 
believe the claim was payable. If the claim is determined to be payable 
on appeal, it will be paid. After the first 3 months of the 
demonstration, we will reduce payment by 25 percent for claims that 
after such prepayment review are deemed payable but did not first 
receive a pre-claim review decision. This payment reduction is not 
subject to appeal. After a claim is submitted, processed, and denied, 
appeal rights for the claim denial would become available in accordance 
with 42 CFR part 405, subpart I. The 25-percent payment reduction 
cannot be charged to the beneficiary. The beneficiary would not be 
liable for more than he or she would otherwise be if the demonstration 
were not in place.
    Additional information is available on the CMS' Web site at https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Overview.html.

III. Collection of Information Requirements

    We announced and solicited comments for the information collection 
requirements associated with the Medicare Prior Authorization of Home 
Health Services Demonstration in a 60-day Federal Register notice that 
published on February 5, 2016 (81 FR 6275). The information collection 
requirements do not take effect until they are approved by OMB and 
issued a valid OMB control number.

    Dated: May 26, 2016.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2016-13755 Filed 6-8-16; 4:15 pm]
 BILLING CODE 4120-01-P