Home Health & Hospice Week

Medicare to spend nearly $400 million on RCD project, it says.

While recently released documents on the Review Choice Demonstration for Home Health Services are shedding some lights on a few details, many questions remain — and their answers could have a drastic impact on home health agencies.

For example: In its May 31 Federal Register notice, the Centers for Medicare & Medicaid Services noted that the revised Pre-Claim Review demonstration project would relaunch in five states. In a subsequent question-and-answer set about the program, CMS further clarified that it “will stagger implementation of the Demonstration, beginning with the state of Illinois, then expanding to Ohio and North Carolina, and later to Texas and Florida,” the Q&As said.

“Of course, we do not want to be first,” notes Sara Ratcliffe, executive director of the Illinois HomeCare & Hospice Council. “But [we] are not surprised they would start with the state with some experience.” Illinois was the only state to undergo PCR in its first iteration, from Aug. 3, 2016 to March 31, 2017, when CMS “paused” the program on the eve of its implementation in Florida.

In the PCR relaunch known as RCD, CMS is swapping out Massachusetts and Michigan for Ohio and North Carolina — substituting two states served by HHH Medicare Administrative Contractor Palmetto GBA for two states that aren’t. And agencies in the other states served by Palmetto shouldn’t count themselves safe just yet.

CMS chose the current five states because they “include known areas of fraudulent behaviour and had either a high home health improper payment rate or a high denial rate during the Home Health Probe and Educate reviews,” the Q&As say.

“CMS has the option to expand to other states in the Palmetto … jurisdiction if there is increased evidence of fraud, waste or abuse in these states during the demonstration period,” CMS adds in the Q&As. The other states at risk for RCD inclusion are Oklahoma, Tennessee, Louisiana, Georgia, Alabama, Indiana, Mississippi, Kentucky, South Carolina, Arkansas, and New Mexico.

In its Paperwork Reduction Act supporting statement for the demo, CMS calculates the burden to HHAs in all 16 Palmetto states in addition to the original five demo states — $40 million versus $24 million. That is based on CMS’s assumption that “the supporting documentation for the Medicare claim … will generally be maintained by providers as a normal course of business and that this information will be readily available” — a claim many HHAs would dispute.

CMS also includes an estimate for the costs associated with performing the demo’s review — a whopping $392.9 million over the five-year period. The agency doesn’t specify whether that’s for the original five states or all 16.

In the PRA notice, CMS repeats its mantra that RCD aims to develop “improved procedures for the identification, investigation, and prosecution of potential Medicare fraud. The demonstration would help make sure that payments for home health services are appropriate through either pre-claim or post payment review, thereby working towards the prevention and identification of potential fraud, waste, and abuse; the protection of Medicare Trust Funds from improper payments; and the reduction of Medicare appeals.”

CMS cites the Comprehensive Error Rate Testing program that “has continuously estimated a significantly high home health improper payment rate, ranging between 32 percent to 59 percent.”

Omission: The report fails to note that denials of home health claims in the CERT program have dropped by nearly half in the last few years. CMS reported a 59 percent payment error rate for 2015 home health claims and a 42 percent rate for 2016. But earlier this year, the 2017 CERT report put the home health error rate at 32 percent (see Eli’s HCW, Vol. XXVII, No. 4). However, the 32 percent rate is still higher than the average 9.5 percent rate for all Medicare providers.

Will All 5 States Start RCD Within A Year?

One of the outstanding questions about RCD is how the 90 percent exemption will work (see related story, p. 181).

Also chief on the list is when exactly the program will roll out. CMS will take comments on the proposal until July 30, and the Q&As pledge that “the revised demonstration will begin no earlier than October 1, 2018.”

Assuming Oct. 1 is CMS’s target date, “of course we would like more time to gear up,” Ratcliffe tells Eli. But “we started last time with a shorter time span between announcement and implementation — June 8, 2016 announcement to Aug. 1, 2016 start.”

Last time, CMS set the second state’s implementation date at April 1, but then scuttled the program in the eleventh hour — much to Florida agencies’ relief. Whether it will follow a similar timeline of starting the next states eight months later this time around remains to be seen.

However: In the PRA burden estimate, CMS notes that “due to a staggered start date for the states, year two is the first full year of participation for all states.” Ergo, all five states will be up and running by Oct. 1, 2019 if the program starts this October.

Illinois agencies would like to see another question about historical data answered soon, according to Ratcliffe. “We would like a fuller picture of agency performance during PCR — the data CMS has made available is only through Jan. 14, 2017,” she says.

The PRA document does seem to answer a question about a grace period, such as agencies had during PCR’s first go-round. The 25 percent reduction of the full claim amount when HHAs fail to participate in RCD’s pre- or post-claim review “will be beginning three months into the demonstration in each state,” CMS says.

HHAs looking for more specifics on how RCD will operate can find a few more details in the PRA support document.

For example: As with original PCR, “when a HHA submits an initial pre-claim review request, the MAC will have 10 days to inform the HHA that their pre-claim review has been given an ‘affirmative’ or ‘non-affirmative’ decision,” CMS says in the PRA filing. “If the HHA receives a ‘non-affirmative’ decision, the MAC will provide a detailed letter showing the exact reasons why the non-affirmative decision was given, and what, if any documentation needs to be submitted in order to receive an ‘affirmative decision.’ The HHA may resubmit a preclaim review request as many times as they wish prior to submitting the final claim for payment.”

The contractors have more time for resubmission decisions. “The MACs will have 20 days to provide a decision for any subsequent pre-claim review requests.”

Plus: CMS says it will have “less frequent collections” by allowing HHAs “request multiple episodes on one pre-claim review request for an individual beneficiary,” the PRA filing says.

Note: Links to the PRA documents are at www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing.html — search for “CMS-10599”.