Medicare exempts Illinois home health agencies from prior authorization

Home health agencies that participated in a failed CMS home health demonstration project will get a reprieve under a revamped version of the effort.

The CMS is allowing home health agencies in Illinois to largely sit out the new Review Choice Demonstration announced in May.

Illinois was the only state that participated in the precursor model, known as the Pre-Claim Review Demonstration, which launched in 2016 and was halted last year following complaints of reduced access to care and major administrative burden.

Home health agencies argued in comments to the CMS that Illinois providers that were part of the original demonstration should get to sit out or receive less oversight under the new prior authorization effort, and the agency is telling White House officials they agree.

Most home health agencies participating in the Review Choice Demonstration for home health services can have their claims reviewed before or after they are paid. Home health providers can also opt out of the experiment entirely. However, they will receive a 25% payment cut in reimbursement for each claim they submit.

Illinois providers will be excused from the options above. If they had no consistent signs of improperly submitting claims under the original demonstration, they can opt submit claims like normal but a Medicare auditor will randomly spot check 5% of their claims every six months for improprieties, according to a notice posted on the Office of Management and Budget website.

A consistent complaint about the new model is that, like its predecessor, it will impose a heavy burden on home health agencies and impede care. The CMS will launch the revamped demonstration in Florida, Illinois, North Carolina, Ohio and Texas. The demonstration will impact 1.3 million claims each year.

It will collectively cost home health agencies in these states $24 million annually to comply with the program over the five-year period, according to the agency.

The CMS said it may expand the demonstration to Alabama, Arkansas, Georgia, Kentucky, Indiana, Louisiana, Mississippi, New Mexico, Oklahoma, South Carolina and Tennessee in coming years.

If it moves forward with those plans, home health agencies in all participating states will collectively spend $40 million annually to comply with the new prior authorization demonstration.

Many home health agencies questioned the need for the new prior authorization demonstration since the last one did not detect widespread fraud.

The CMS said it believes the old model had a deterrent effect.

"Knowing that their documentation and claims would be scrutinized, a number of providers did not submit pre-claim review requests during the demonstration, and did not submit claims for payment," the agency said.