Home Health & Hospice Week

‘Targeted’ P&E will review up to 40 claims per agency, per round.

If you thought Rounds 1 and 2 of Medicare’s Probe & Educate audit initiative were painful from a cash-flow and workload perspective, just wait for the third phase that targets home health agencies for heavier review.

Now: The Centers for Medicare & Medicaid Services will finish up Round 2 of the P&E campaign next month, CMS notes on its website.

Each round has reviewed five claims from HHAs — the first round covered claims from every single HHA nationwide, while the second round chose claims only from HHAs that had two or more claims denied in the Round 1 review process.

For HHH Medicare Administrative Contractor CGS, only about 5 percent of agencies were exempted from the second round; for Palmetto GBA, it was about 15 percent, the MACs told Eli earlier this year (see Eli’s HCW, Vol. XXVI, No. 3).

Then: Medicare is launching Round 3 of Probe & Educate “this fall” after Round 2 concludes, and it’s likely to take a much heavier toll on involved providers, experts predict. The Targeted P&E program, which CMS calls “TPE,” will review 20 to 40 claims from chosen agencies, CMS says in a recent post to its P&E website.

Good news: “For those agencies that have done well with the previous Probe and Educate and did not have two or more denials, they are pretty much in the clear for inclusion in this new program,” says Judy Adams with Adams Home Care Consulting in Durham, North Carolina.

Bad news: However, based on the MACs’ Round 1 stats, that’s likely to be a small pool. For agencies targeted, “this program could represent a major hurdle,” Adams warns. “It takes a lot of time for agencies to prepare and respond to ADRs, and a 20-40 record sample is four times the amount of work under the previous Probe & Educate initiative.”

The burden will be particularly heavy for small providers, predicts billing expert M. Aaron Little with BKD in Springfield, Missouri. “We currently have a small provider subject to the ‘20-40’ claims review, and it’s created a significant cashflow problem,” Little tells Eli.

Plus, TPE won’t just have one round, CMS says on its website. It will consist of up to three rounds reviewing 20 to 40 records each.

“Even for larger, more sophisticated providers, the review process still consumes resources to gather the documentation, submit it, track it, and act on any negative findings,” Little says.

“Most agencies do not have the manpower available to be able to respond to this number of record reviews,” Adams contends.

Will You Be A Target?

It remains unclear exactly who will be subject to TPE, however, notes the National Association for Home Care & Hospice.

When CMS moved from Round 1 to Round 2, every agency that didn’t pass Round 1 with zero or one claim denied was subject to Round 2. But whether that will be the case for TPE is murky.

Under TPE, MACs “will focus on specific Home Health Agencies … who have been identified through data analysis as being a potential risk to the Medicare trust fund or who vary significantly from their peers rather than all HHAs,” CMS says on its website.

After each round of TPE, providers may be removed if they perform well enough. To be removed, they must “demonstrate low error rates or sufficient improvement in error rates, as determined by CMS,” the agency says.

“CMS does not state the threshold of denied claims from round two Probe and Educate that would place a provider in the HH TPE,” NAHC points out in its member newsletter. “Nor do they define ‘low error rates or sufficient improvement in error rates’ that would allow a provider to be removed from the HH TPE.”

Clues: HHAs subject to TPE will likely be those “that had prior denials or have statistics showing a higher denial rate based on other Additional Documentation Request edits, or are significantly different from their peers,” Adams predicts.

Red flag: “Those agencies that have a history of the common denial for ‘lack of response to ADRs’ are very much at risk,” Little says.

Rumor has it: An industry source tells Eli that they’ve heard from MAC staff that the threshold will remain the same for being exempted from TPE. In other words, HHAs with two or more denials under Round 2 of P&E concluding this September will go on to be included in TPE this fall.

And the threshold will be slightly lower for progressing from the first round of TPE to the second round — about 33 percent, one industry veteran says.

Why so low? The cadre of medical reviewers geared up to audit claims under the now-stalled Pre-Claim Review demonstration needs something to do, the source points out. TPE review fits the bill.

A MAC representative did not respond to questions about the thresholds by press time.

You Must Watch Like A Hawk For ADRs

CMS is moving forward with Round 3 of the program because “results of the Home Health Probe and Educate program have been favourable based on the decrease in the number of claim errors after providers received education,” according to the P&E website. “CMS is now further improving this strategy by moving from a broad Probe and Educate program to a more targeted one.”

CMS maintains that the 20-to-40-claim review size under TPE “is relatively small in comparison with previous provider specific review where the number of claims reviewed for an individual provider may have been much larger.”

MACs will provide education based on review results after each round. However, the MACs may also furnish education during the round “when easily resolved errors are identified, helping the provider to avoid additional similar errors later in the probe,” CMS says.

In both cases, the MACs will allow 45 days to elapse before re-starting review of claims “so [the] provider has time to improve,” CMS indicates in a new TPE flow chart.

Harsh end: If agencies don’t pull up their TPE denial stats, they will face a world of hurt.

“HHAs with continued high error rates after three rounds of TPE may be referred to CMS for additional action, which may include 100 percent prepay review, extrapolation, referral to a Recovery Audit Contractor (RAC), etc.,” according to the P&E website.

Watch out: Even if you do improve and get taken off TPE, the status isn’t permanent. A removal means TPE review is discontinued only “for at least 12 months,” the flow chart says.

Note: More information about TPE, including

a link to the flow chart, is at www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Medical-Review/Home_Health_Medical_Review_Update.html.