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CMS considers resuming effort to stop home health agencies fraud

The Centers for Medicare and Medicaid Services is considering resuming a program, paused in April 2017, that required home health agencies in five states to get prior authorization to provide a service before being reimbursed by Medicare in order to cut down on fraud in the program for older Americans.

The notice comes after the Government Accountability Office May 21 recommended CMS resume prior authorization, saying in a report that prior demonstrations requiring it saved the Medicare as much as $1.9 billion.

Restarting the requirement is "a potential negative for home health providers," Cowen Washington Research Group analyst Rick Weissenstein wrote in a May 30 note.

Though Weissenstein did not identify any in particular, Louisville, Kentucky-based Kindred Healthcare and other for-profit companies account for a majority of agencies providing the service, according to a 2014 study in Health Affairs.

CMS had originally started the demonstration project requiring home health agencies, which provide care in patients homes, get pre-approval in Illinois, Florida, Texas, Michigan, and Massachusetts in June 2016.

The agency noted in a fact sheet at the time that 59% of home health claims in 2015 were improper in large part because of insufficient documentation. CMS said requiring pre-authorization, "will help educate HHAs on what documentation is required and encourage them to submit the correct documentation," but acknowledged education was not the only goal.

The agency said it was also part of an effort to "shift away from a 'pay and chase' approach to focus on preventing fraud."

Indeed, the GAO report said that CMS has tried demonstration projects requiring prior authorization for other forms of Medicare spending, including for certain scooters and power wheelchairs in 2012 and non-emergency ambulance trips in 2014.

All the efforts to require pre-authorization decreased spending in those areas from 17% to 74%, resulting in savings to Medicare from $1.1 billion to $1.9 billion during the times the requirement was in place.

CMS, however, paused the requirement on home health agencies to consider ways to improve the demonstration project.

In proposing to restart it, CMS said it is seeking comments on either requiring pre-approval or being reviewed after being reimbursed until an agency met a certain threshold of proper payments.