In this blog post, we will discuss what the pre-claim review demonstration is, the history of pre-claim review, and the latest updates.

In June 2016, CMS announced implementation of a three year Home Health Pre-Claim Review Demonstration. The demonstration was designed to test whether a Pre-Claim Review (PCR) process would improve the identification, investigation, and prosecution of Medicare fraud occurring among home health agencies (HHAs).

On April 1, 2017, CMS suspended Pre-Claim Review to consider a number of changes for structural improvement of the program. Subsequently, on May 29, 2018, it issued a new proposal to re-instate the program with changes, calling it “Review Choice Demonstration.” CMS revised the Demonstration to include more flexibility and choice for HHAs, and incorporated risk-based changes to reward agencies who show compliance.

What is Pre-Claim Review?

CMS said the Pre-Claim Review Demonstration would not create new clinical documentation requirements and that HHAs would submit the same information they currently submit for payment, just earlier in the process. Medicare would review the documentation to determine if all coverage requirements for home health services were met and would issue a PCR decision within ten days. If the documentation submitted was not sufficient, then the HHA (or beneficiary) would need to submit additional documentation to support the claim. Once sufficient documentation was submitted, Medicare would pay the claim following standard processes. If a claim was not approved during the pre-claim process, then final payment would be denied, but the HHA could submit an appeal.

If an HHA failed to submit a request for pre-claim review, but the final claim was submitted for payment, then the final claim would be subject to a pre-payment medical review. If the claim was determined to be eligible for payment, the HHA would incur a 25% penalty. This penalty cannot be appealed and HHAs cannot seek payment from the beneficiary.

History of Pre-Claim Review

Roll out of the Pre-Claim Review Demonstration began in Illinois on August 3, 2016 with Florida, Texas, Michigan, and Massachusetts scheduled to follow. However, on March 31, 2017, due to to pressures from providers, lawmakers, and others, CMS announced that as of April 1, 2017, the demonstration would be suspended for at least 30 days to allow consideration of a number of changes for program improvement.

The pre-claim review demonstration remains suspended in Illinois and did not expand to other states as originally planned.

Pre-Claim Review Revised: Review Choice Demonstration

In a memo issued by CMS on May 29, 2018, it announced an opportunity for the public to comment on a new proposal that would reinstate pre-claim review for home health providers. Under this proposed program, known as “Review Choice Demonstration,” CMS would offer a choice for providers to participate and demonstrate their compliance with CMS’ home health policies. Providers in the Demonstration states could participate in submitting 100% of their claims for pre-claim or post-payment review until they reach a target approval rate. Once an HHA reaches the target approval rate, it may choose to stop submitting claims for review, but would be subject to spot checking of their claims to ensure continued compliance.

Home health providers that do not wish to participate in the above method of review could choose to submit claims for payment without undergoing such reviews. However, all payments would be penalized a 25% payment reduction and may be eligible for review by the Recovery Audit Contractors (RAC).

CMS proposes to initially implement the demonstration in Illinois, Ohio, North Carolina, Florida, and Texas with the option to expand to other states in the Palmetto/JM jurisdiction. It states that the demonstration would begin no earlier than October 1, 2018 and would last for five years.

Home health stakeholders are unhappy about the resurgence of PCR. According to Joy Cameron, Vice President of Policy and Innovation for ElevatingHOME, “We are not excited at all about the resurgence of the Pre-Claim Review Demonstration. This would hurt access and people’s ability to get care. Our members are not at all happy about this.” Additionally, Bill Dombi, president of the National Association for Homecare & Hospice (NAHC) commented, ““The return of pre-claim revenue, even with revisions, is premature and may be entirely unnecessary. CMS has not taken advantage of what it learned during PCRD in Illinois in 2016-2017 where claims errors that related to documentation were ultimately correctible.”


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