New Prior Authorization Requirements are Coming for Home Health Agencies

An anti-fraud pilot demonstration is planned for home health agencies in several states.

Public comments currently are being accepted on a new pilot proposal from the Centers for Medicare & Medicaid Services (CMS). Deadline is April 5, 2016.

In an effort to measure the extent of probable fraud in the home health industry, CMS wants to float a trial balloon in 5 states: Florida, Illinois, Texas, Massachusetts, and Michigan. The pilot and demonstration project would require home health agencies (HHAs) to obtain prior authorization (PA) for Medicare fee-for-service claims.

CMS explains that under this pilot, its agents will look at a national random sample of HHA claims and collect information from related HHAs, physicians, and Medicare beneficiaries. This data, along with a service history of each HHA, referring provider, and beneficiary, will be used to set a baseline, “to estimate the percentage of total payments that are associated with probable fraud and the percentage of all claims that are associated with probable fraud for Medicare fee-for-service home health.”

How Prior Authorization for Home Health Agencies Would Work

Medicare contractors will request the information required by this pilot from HHA providers submitting claims.

The PA procedure used for the proposed Medicare Prior Authorization of Home Health Services Demonstration would be similar to that used in the Prior Authorization of Power Mobility Device (PMD) Demonstration implemented by CMS in 2012. Other existing PA procedures under TRICARE, certain state Medicare programs, and private insurance plans also may serve as examples to be adopted.

Potential Impact of New Prior Authorization Requirement

The National Association for Home Care & Hospice (NAHC) expressed concern that these new PA requirements could increase administration costs for HHAs, and the NAHC is likely to oppose this CMS proposal because they believe ”antifraud enforcement efforts are already well targeted.”

How Industry is Preparing for Change

The time is now for stakeholders potentially impacted by this change to express their concerns through the CMS public comment process. Commenters are encouraged to frame their arguments in terms of estimated burden, as explained below.

Otherwise, some HHAs are bracing for tighter federal regulations by ensuring that their business is well diversified across multiple payers, and not overly dependent on Medicare.

How You Can Have Input into New Prior Authorization Requirements

Before this proposal may proceed, the Paperwork Reduction Act (PRA) of 1995 requires public comments to be sent to the Office of Management and Budget (OMB) for approval.

OMB will consider the estimated burden associated with this new PA requirement in terms of its (1) necessity and utility for proper performance of CMS functions; (2) accuracy; (3) ways to enhance the quality, utility, and clarity of information to be collected; and (4) use of automated collection techniques or other forms of information technology to minimize the information collection burden.

The public notice with instructions for public comments is available at https://federalregister.gov/a/2016-02277.