A CMS proposal aimed at curbing fraud in home health service claims could harm patient care and will unfairly harm agencies that are compliant, stakeholders say.
In a notice that went largely under the radar last month, the CMS said it was considering launching a three-year demonstration in which beneficiaries would need to get prior approval before they get home health services.
The effort, which would affect services in Florida, Texas, Illinois, Michigan and Massachusetts, aims to more closely scrutinize claims before they are paid.
The demo states have been identified as contributing to high levels of improper payments, according to agency data.
During fiscal 2014, 51.4% of the payments, or $9 billion, for home health agency services were “improper.” The improper payment rate for HHA claims was 17.3% or $3 billion in 2013.
An improper payment can occur when funds go to the wrong recipient, the right recipient receives the incorrect amount of funds, documentation is not available to support a payment or the recipient uses funds in an improper manner. The tally includes fraudulent claims but is not a measure of fraud.
“We believe this demonstration design will assist the CMS in analyzing the effectiveness of a prior authorization process in increasing the ability to identify, investigate, and prosecute fraud as well as reduce improper payments,” the agency said.
Stakeholders however, fear the worst. “Requiring prior approval for every prospective home health recipient in a state for the provision of critically important services that help keep people in their homes rather than institutions, often when they are at their most medically vulnerable, will effectively delay and deny home health coverage for countless Medicare beneficiaries,” says Center for Medicare Advocacy, an organization that helps ensure seniors have access to coverage and treatment.
Beneficiaries are enraged by the proposal. “I am sick of the government trying to stop our different benefits, which are few, with the excuse of stopping fraud,” an anonymous 72-year-old beneficiary wrote in a letter to the CMS. “That's not what you are doing. You are stopping our benefits.”
Industry stakeholders said the proposed demonstration could punish home health agencies that don't have a history of fraud.
Dennis Heide, owner of Pinnacle Home Healthcare in Orlando, Fla., asked in a comment why the CMS was not going after the suspected fraudulent agencies individually. He noted the agency could better target actual bad apples in Medicare.
“This pilot will have absolutely no effect on fraud in agencies that already work diligently to follow the extensive rules currently in place. In fact, it will cost the system more money through administrative costs,” Heide says.
The CMS estimates that administrative costs for industry will be $21.6 million for the first three years. However, getting the project off the ground will cost the federal government more than $300 million.
The CMS is taking comments on the proposal until April 5. Before the agency can move forward, it will also need the approval of the Office of Management and Budget (OMB) as there is a data collection component to the proposed initiative.