The drop in CMS’ improper pay rate for fee-for-service Medicare was driven by a reduction in improper pay to home health agencies and inpatient rehabilitation facilities — though CMS says home health companies and IRFs, along with nursing homes, were the major contributors to the 9.5 percent improper pay rate in fiscal 2017, and the HHS Office of Inspector General said program integrity is still a top management challenge for the agency.
Medicare’s improper pay rate has not been below 10 percent since fiscal 2012, when it was 8.5 percent. It rose to 10.1 percent in 2013 and reached 12.7 percent in 2014 before falling to 11 percent in 2016 and 9.5 percent last year.
CMS said the home health and IRF improper pay rates improved markedly between fiscal 2016 and 2017 — from about 42 percent to 32.3 percent for home health agencies and 62.3 percent to 39.8 percent for IRFs.
The agency attributed the change in the home health improper pay rate to revisions of the face-to-face encounter requirements, which took effect in January 2015, as well as probe and educate reviews.
Keith Myers, chair of the Partnership for Quality Home Healthcare, also said the group credits in part CMS’ reversal of the narrative requirement for the face-to-face encounter. Although those changes took effect January 2015, Myers said that because most reviews are conducted retrospectively, the improvement could have carried over. Also, Myers said the home health providers have focused on documentation issues to avoid denials, and the decreasing error rate is evidence of that.
Bill Dombi, president of the National Association for Home Care and Hospice, said the improvement is heartening. Dombi said he believes the change in the improper pay rate could be due to home health agencies working to make changes to documentation by incorporating home health records into those of physicians. Denials often stem from physician documentation not being sufficient to support the home health benefit, he said, and NAHC has been encouraging home health agencies to incorporate their records into those of patients’ doctors.
Dombi also noted that the pending Home Health Documentation and Program Improvement Act would have CMS consider the medical record of the home health agency and the physician when reviewing home health claims. That legislation also would allow for a settlement process for certain denied home health claims between January 2011 and January 2015 that have been appealed.
Lawmakers are considering including the legislation in the House’s Medicare extender package, Dombi said, though the policies were not included in the House Ways & Means’ outline. Dombi also said the group is working on companion legislation for the Senate.
Still, CMS said insufficient documentation continues to be the biggest problem for home health claims, as well as nursing home claims which saw an increase in the improper pay rate from about 7.8 percent in fiscal 2016 to 9. 3 percent in fiscal 2017. For IRFs, lack of medical necessity continues to be the major error in claims, CMS says, despite the improvement, which CMS credited to a rule requiring IRFs to report how much and what type of therapy patients receive and Supplemental Medical Review Contractor reviews.
The OIG named Medicare program integrity one of its top management challenges for HHS, and a key component of that challenge is reducing improper pay, according to an OIG report released last week. One of the OIG’s focus areas is reducing improper pay for home health services. The office says that in fiscal 2018, it will prioritize work that identifies ways to reduce improper pay for those providers by reducing Medicare spending in what it calls geographic hot spots.
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