Home Health & Hospice Week

Reimbursement crash looms next month.

Medicare officials may be saying things are looking up under the Pre-Claim Review demonstration project in Illinois, but sources on the ground dispute that rosy outlook.

In statistics released Oct. 5, the Centers for Medicare & Medicaid Services cheers its 66 percent affirmation and partial affirmation rate through week 8 of the demo that started Aug. 3. It cites a 34 percent full non-affirmation rate. And “over the first eight weeks ... affirmation rates of pre-claim review requests have been increasing, meaning more requests are getting positive decisions,” CMS adds.

CMS also claims “the time to complete each submission through the online portal decreased from an average of 12 minutes in Week Two to under 9 minutes in Week Eight.”

The often cited Aaron Levenstein quote, “Statistics are like bikinis. What they reveal is suggestive, but what they conceal is vital” is particularly relevant to the data released from CMS, HHAs say.

What’s concealed: In the beginning weeks of PCR, CMS and Medicare Administrative Contractor representatives told Eli that the non-affirmation rate was around 60 percent (see Eli’s HCW, Vol. XXV, No. 34). That’s still true, points out Sara Ratcliffe with the Illinois Home Care and Hospice Council. It’s just that CMS is lumping in partial affirmations with full affirmations.

A partial affirmation could pay as little as $300, notes the National Association for Home Care & Hospice. That could be a major reduction from a claim billing $3,000, the trade group says.

When you add together the full and partial non-affirmations, the denial rate is 66 percent.

Adding partial affirmations to affirmations is “nonsense,” NAHC declares in analysis of the data. CMS needs to disclose its partial affirmation statistics — and their financial impact — as well. “HHAs are incurring the full cost of the services rendered,” the trade group stresses.

Just the 34 percent non-affirmation rate “equates to $58 million in un-reimbursed care for the first two months of the PCR demonstration alone,” NAHC exclaims. “Those losses are unsustainable and HHA cannot survive much longer with a 34 percent rejection rate.”

“Is 34 percent supposed to be good?” Ratcliffe asks. “That’s pretty horrible.”

Ratcliffe and Chicago-based regulatory consultant Rebecca Friedman Zuber agree that agency closures are likely on the horizon in Illinois.

First hit: HHAs are already suffering under the drastically increased administrative burden as they submit and resubmit PCR requests seeking affirmations. Unlike CMS’s time estimate, agencies report it takes more like an hour to submit each request, Ratcliffe tells Eli. That’s not including the time it takes to compile and review the information prior to the submission process.

Second hit: Many agencies are withholding submitting PCR requests until they figure out the PCR system, says Friedman Zuber, who works with IHCC. They are testing out a sample of claims, then hope to submit their full volume when the wrinkles are ironed out on both the provider and MAC ends.

Third hit: Some HHAs are also delaying initiating care until they receive the necessary documentation from the physician, says reimbursement expert M. Aaron Little with BKD in Springfield, Mo.

Fourth hit: November is going to get ugly, as HHAs see an end to the PCR grace period and start submitting their full volume of claims, Ratcliffe predicts. “Very few agencies are submitting all of their episodes for review, even 10 weeks into the demonstration program,” IHCC said in an Oct. 4 letter about PCR to CMS Acting Administrator Andy Slavitt. “This is true partly because agencies do not have enough staff available to complete the extensive review and correction of documents required in order to comply with the expectations of Palmetto GBA reviewers, and partly because agencies are trying to identify exactly what information is being sought in order to insure that submissions will receive provisional affirmation.”

CMS said in PCR’s first eight weeks, MACs returned decisions within the 10- and 20-day deadlines 99 percent of the time. Expect that figure to go down when the “real” claim volume hits. Prepare for Palmetto to be “staggered” by the full claims volume, Friedman Zuber says.

Fifth hit: December will also be painful as RAPs submitted for August claims start auto-canceling without a final claim submitted for the episode, Little says.

Sixth hit: HHAs with too many auto-canceled RAPs will fall under CMS’s policy of paying zero dollars for RAPs. In a July special Open Door Forum on PCR, a Palmetto GBA rep said the MAC was looking into the issue. But so far Palmetto has announced no resolution.

IHHC has heard anecdotal tales of momand-pop agencies closing in the state, but so far no association members have shut their doors, Ratcliffe says. But expect that fact to change if CMS doesn’t provide relief to Illinois agencies under PCR.

Many agencies in the state will go on providing unreimbursed care and put themselves out of business under the demo’s draconian review process, Friedman Zuber predicts. Agencies particularly at risk are those in rural areas, run by county health departments, and freestanding agencies without “deep pockets” from a larger organization such as a health system to see them through.

Many agencies are “appalled” that they can’t provide the care Medicare should be covering due to PCR problems, Friedman Zuber relates.