October 5, 2016 CMS released “Early Data from Illinois” regarding the pre-claim review (PCR) demonstration program. While CMS attempts to paint a somewhat rosy picture of the project, both the data presented along with the data missing demonstrate that the problems that HHAs have cited with PCR are significant and growing.
Here is a review of the data report in line with the CMS presentation. Submission and Review Report: CMS indicates that 91% of review requests were submitted through the contractor’s online portal with the time to complete the submission dropping from an average of 12 minutes to 9 minutes in Week 8. Response: The CMS data is highly misleading. It does not include the extensive time needed to collect the documentation for submission nor does it include the time it takes to review all that documentation for compliance. While CMS is correct in stating that HHAs have the responsibility to collect this documentation, its assemblage, review, and submission is a new requirement under the demonstration project. An HHA study shows that the new functions take nearly one hour of nurse time per preclaim review submission not just the 9-12 minutes online. Report: Reviewers provided decisions within the required timeframes more than 99% of the time. Response: In the first two months of the demonstration project, CMS contractors should have received an estimated 50,000 pre-claim review requests. However, most HHAs have submitted only a fraction of that amount as they are holding submissions attempting to determine the outcome of a sample of their claims. CMS has not disclosed the actual number of submissions, but has confirmed that it is lower than claim volume during the same period of 2015. That means that CMS has yet to come close to seeing the workload level that actually exists. CMS should be asked to disclose its current workload in PCR along with its monthly pre-PCR workload for Illinois. Provisional Affirmation Rate Report: CMS notes that the combination of provisionally affirmed and partially affirmed decisions has increased to 66% with a non-affirmation rate at 34% as of Week 8. CMS indicates that this result is an improvement over the 2015 national improper home health payment rate of 59%.
Response: In 2015, Medicare spending on home health services in Illinois exceeded $1 Billion. A 34% rejection rate translates to nearly $350 million of unreimbursed care. For the first two months of the PCR demonstration, that equates to $58 million in unreimbursed care already. HHAs cannot survive for much longer with a 34% rejection rate.
More importantly, Medicare beneficiaries cannot withstand a 34% rejection rate. PCR is a direct barrier to care access. HHAs with a 34% rejection rate restrict patient admission and delay the start of care until an affirmation is received. Further, patients subject to a PCR rejection self-terminate care to avoid a financial liability for future care. There is a high risk that such patients end up in the hospital when their condition deteriorates from lack of needed home health services. The rejection rate is also higher than the reported 34%. CMS does not disclose the level of partial affirmations, yet includes them in its calculation as equivalent to full affirmations. A “partial affirmation” is a partial denial. The financial impact of partial affirmations can be significant. For example, if an HHA submits a preclaim review for a plan of care that would result in a $3000 episode if fully accepted, it can result in a partial affirmation with only $300 of the physician-prescribed services approved. It is crucial to understand specifically what the distribution of full affirmations and partial affirmations is in the PCR data along with an understanding of the financial impact on the claim payment amount as HHAs are incurring the full cost of the services rendered.
It is also notable that CMS presents the proverbial apples to oranges comparison by noting that the nonaffirmation rate is lower than the 2015 national improper payment rate of 59%. The 59% calculation is based on the amount paid for home health services that the CERT evaluation concluded should not be paid. It is the ratio of the total dollar improperly paid to the total dollars paid. The 34% metric in the CMS report is a ratio of total preclaim submissions to preclaim submission non-affirmations. These are completely different calculations. Reasons for Non-Affirmations Report: CMS reports that the common reasons for non-affirmation include: Skilled nursing/therapy not medically necessary or not documented 25% Homebound status not documented 18.6% Face-to-face missing/incomplete 5.6% Other documentation errors 50.8% Response: These data are difficult to understand given that virtually all non-affirmations list multiple reasons for the rejection. It is not unusual to receive a non-affirmation that has all four of the reasons listed in the CMS report. In addition, these reasons are highly inconsistent with the CERT report that shows a 94.8% error rate due to “insufficient documentation.” Medical necessity errors comprise 4.1% of the alleged errors. Ongoing and Enhanced Education Report: CMS touts its education efforts around PCR. Response: The education provided by CMS is useful to HHAs. However, it is based on the erroneous assumption that CMS and the MACs are doing everything right themselves. In fact, the evidence of MAC policy errors, claims review errors, and blatantly wrong decisions in preclaim review is mounting.
It is note worthy that the PCR was not needed for CMS to provide enhanced education and support designed to reduce errors. CMS already had identified through the CERT program the nature of HHA documentation errors. As such, instead of expending hundreds of millions of Medicare dollars on a review process intended to correct errors, CMS could simply devote a portion of that spending to educating providers, physicians, beneficiaries and MACs on Medicare coverage requirements and reforming outdated, confusing, and often unmanageable documentation policies. Summary The CMS data report on PCR is useful in proper context. While CMS appears to celebrate a reduction of rejected claims to only 34%, that metric is not worth celebrating as HHs and their patients cannot absorb the cost of that level of rejections. In addition, the administrative burden of PCR is excessive and will only grow as HHAs submit their backlog of claims. The information gathered to date by CMS through the CERT evaluations and the PCR project in Illinois is more than enough to permit CMS to develop a targeted educational and documentation policy reform effort that can successful correct any systemic errors of HHAs and the Medicare Administrative Contractors with continuing PCR. The resources are better spent on corrective actions that go to the root causes of documentation errors than to sustain a burdensome project that has served it purpose sufficiently.