April 5, 2016
Centers for Medicare & Medicaid Services
Office of Strategic Operations and Regulatory Affairs
Division of Regulations Development
7500 Security Blvd.
Baltimore, MD 21244-1850
Delivered Electronically through www.regulations.gov
Re: Medicare Prior Authorization of Home Health Services Demonstration (CMS-10599)
To Whom It May Concern:
The Center for Medicare Advocacy (the Center) appreciates the opportunity to comment on CMS’ Paperwork Reduction Act (PRA) notice in the Federal Register announcing their effort to seek approval from the Office of Management and Budget (OMB) to collect information relating to the Medicare Prior Authorization of Home Health Services Demonstration (CMS-10599).
The Center, founded in 1986, is a national, non-partisan education and advocacy organization that works to ensure fair access to Medicare and to quality health care. We draw upon our direct experience with thousands of individuals and their families to educate policymakers about how their decisions affect the lives of real people. Additionally, we provide legal representation to ensure that beneficiaries receive the health care benefits to which they are legally entitled, and to the quality health care coverage and services they need.
On February 5, 2016, the Centers for Medicare & Medicaid Services (CMS) published a two-page Paperwork Reduction Act notice in the Federal Register announcing their effort to seek approval from the Office of Management and Budget (OMB) to collect information relating to a demonstration project. Pursuant to the project, CMS would identify, investigate and prosecute fraud among Medicare home health agencies by performing prior authorization before processing claims for home health services in several states. On the same day, CMS published a Supporting Statement on their website, further describing the demonstration.
Targeting “high risk fraud states”, the three year demonstration would occur in two phases: Phase I in Florida, Texas and Illinois and Phase II in Michigan and Massachusetts. CMS notes that it would establish a prior authorization procedure that is similar to the Prior Authorization of Power Mobility Device (PMD) Demonstration, which was implemented in 2012. The demonstration, according to CMS, would also follow and adopt prior authorization processes that currently exist in other health care programs such as TRICARE, certain state Medicaid programs, and in private insurance.
To initiate the prior approval process in the affected states, CMS explains that the home health agency “or the beneficiary submits a prior authorization request with all relevant documentation based on applicable Medicare rules and policy requirements, to a contractor.” After review, the contractor “will communicate a decision that provisionally affirms or non-affirms the request for prior approval.” If the documentation is complete “but all relevant Medicare coverage requirements are not met” the contractor will advise that Medicare will not pay for the treatment, and any claim submitted will be denied (subject to appeal). If a home health agency provides care without first seeking prior authorization, and the claim is determined to be payable, the agency will be penalized with a 25% payment reduction.
Prior Authorization Will Delay or Deny Medically Necessary Care
A blanket, state-wide prior authorization program applied to all home health services as outlined by the PRA notice will lead to both unnecessary delays and denials of medically necessary care for Medicare beneficiaries who need home health services. Such barriers will affect both those who need home health care on a short-term basis as well as those who have ongoing, chronic care needs. Individuals who need home health care are often at their most medically vulnerable, including those awaiting discharge from a hospital or skilled nursing facility, and require physician-ordered care without delay. Blanket prior authorization determinations by a contractor will often be cursory reviews that may occur before all documentation is available, including physician certifications (for example, the need for prior authorization would come up before many Face-to-Face meetings occur since those visits can take place within 30 days after the start of home care). This will undoubtedly lead to denials by contractors that are operating on incomplete information.
Individuals with chronic conditions who need care over the long-haul to maintain functionality, slow deterioration, or prevent more costly institutionalization already face challenges obtaining necessary home health care. Existing rules, payment structures and proposed performance measures within the home health benefit already create financial incentives to select patients who require less care and can demonstrate swift clinical and functional improvement, and disincentives to serve those patients who have the greatest need for care, especially skilled nursing care. More broadly, providers and contractors – including those likely to perform the proposed prior authorization process – continue to illegally deny Medicare coverage and care based on an “Improvement Standard,” resulting in beneficiaries nationwide failing to obtain needed skilled nursing and therapy coverage. Adding a prior authorization process to all home health services in a given state will further chill providers’ willingness to serve individuals who need ongoing care, and will further prime contractors to inappropriately deny coverage.
Prior Authorization Would Exacerbate Current Problems with Appeals
In our experience, beneficiaries already face almost insurmountable odds when appealing claims denials. For example, from 2010 through 2013, the Center received 14,372 home health redetermination and reconsideration decisions. Only 346 of these were favorable, a “success rate” of 2.4%. In one year, 2011, the rate was 0.61%, and the trend continues; in 2014 the denial rate was 98.8%. In meetings between the Center and CMS leadership, CMS has confirmed these statistics are consistent with the national rates. These statistics relate to formal administrative appeals, most of which involve services already rendered and documentation that is more or less complete. Instituting a prior authorization process as an additional barrier before even the administrative appeals process can begin will make obtaining coverage even more difficult.
If a contractor determines that prior authorization documentation is not complete under this proposal, under existing DME rules (upon which this proposal is based), a provider has unlimited “resubmits”. For the initial submission, a contractor must respond within 10 business days. For every subsequent submission a contractor has up to 20 days to respond. It is unclear whether this proposal mirrors these timeframes, and whether unlimited submissions will be allowed to get the documentation right or any avenues of appeal would exist in this situation. What is clear, however, is that providers who focus on individuals who only need short-term services will face incentives to move on to other prospective patients rather than navigate a drawn-out prior authorization process. Even if a provider is willing to resubmit documentation in order to satisfy prior authorization requirements, a beneficiary in need of services will be forced to go without them, thus jeopardizing his or her ability to remain safely at home.
If a provider chooses to bypass the prior authorization process altogether and renders services which are later deemed to be coverable, this will result in payment for services at a rate of 75% and the provider will be “penalized with a 25% payment reduction.” Such reduction will occur for providing services that – even after an appeal – everyone agrees should be legitimately paid.
Assuming there will be some means to appeal or otherwise challenge the denial of prior authorization for home health services a provider is willing to render, the additional burden of obtaining prior authorization before services are provided will exacerbate existing due process problems for Medicare beneficiaries and providers who serve them. If there will be no practical means to challenge adverse prior authorization decisions, due process will be denied altogether.
Those who need – and benefit from – home health services are often among the most vulnerable Medicare beneficiaries, who often do not have the emotional or physical wherewithal to overcome the current barriers to accessing care (including strict coverage rules, unfriendly payment structures, dis-incentivizing performance measures), let alone have their home health providers subject to an onerous and all-encompassing prior authorization system.
Further, this proposal would also create tremendous additional pressure on the already over-burdened health care delivery system creating more bottlenecks from providers’ offices to hospitals to skilled nursing facilities to homes, further slowing urgently needed care to beneficiaries and allowing their conditions to worsen in the process.
Documentation Problems Do Not Equate To Fraud
In the PRA notice, CMS states that the purpose of this proposal is to “assist in developing improved procedures for the identification, investigation, and prosecution of Medicare fraud occurring among HHAs providing services to Medicare beneficiaries.” To the contrary, the proposed prior authorization demonstration will not advance this cause.
In the PRA notice, CMS notes that it would establish a prior authorization procedure that is similar to the Prior Authorization of Power Mobility Device (PMD) Demonstration, which was implemented in 2012. CMS has also recently pointed to the PMD demonstration as a model for a new prior authorization process for certain identified Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) before they can be approved for Medicare payment, effective February 2016. As the Center has written elsewhere, data released from CMS raises concerns that this rule creates impediments to beneficiary access to reasonable and necessary DMEPOS.
In supporting prior authorization in the new DMEPOS rule, CMS relies on the PMD Demonstration program in which monthly expenditures decreased over a three-year time period from $12 million to $3 million in the program’s original seven states, and from $10 million to $2 million in the program’s twelve additional expansion states. Those are payment decreases of 70% to 80%.
CMS indicates that these substantial payment decreases were possible because prior authorization stops payment for equipment and supplies that are “frequently subject to unnecessary utilization.” Is it possible that a 70% to 80% decrease in payments (translate to “a decrease in approval for equipment and supplies”) correlates to a similar amount of fraud in the program? If so, that would be a win-win for Medicare and for beneficiaries as CMS should address fraud and only pay legitimate claims. Unfortunately, the actual rate of fraud is closer to 8% than 80%. According to the Federal Register, “for the 2014 reporting period, 92 percent of the DMEPOS improper payment rate is attributed to insufficient documentation.” We note that this is strikingly similar to the 90% insufficient documentation rate cited concerning home health payments in 2014, discussed below.
Insufficient documentation is often a simple mistake in the process of documenting the need for the equipment or supply: a doctor leaves off a date, or a therapist doesn’t complete a field. These are clerical errors, not fraud. This distortion of the facts by CMS, and the reports issued by the Office of the Inspector General (OIG) and the Government Accountability Office (GAO), concern beneficiary advocates when it comes to implementation of the prior authorization program in the DMEPOS context, and our concerns certainly translate to the home health arena.
In its Supporting Statement for the PRA notice, CMS points to a 51.4% improper payment rate for home health claims in 2014 (up from 17.3% in 2013). The types of errors leading to improper payment identified by CMS is led by a 90% rate of “insufficient documentation errors” followed by 8.9% rate of “medical necessity errors”.
From 2011 through 2014, the year CMS data cites to, CMS required, as part of the Face-to-Face encounter documentation, a physician narrative statement describing how the clinical findings from the encounter supported the patient’s homebound status and need for skilled services. In the Center’s experience, this created a major impediment for Medicare patient’s access to services and for participating home health agencies to be paid. During this period, Medicare contractors denied a large percentage of home health claims on technical grounds without ever reviewing the medical record, finding Face-to-Face encounter documentation was insufficient to substantiate eligibility. Although CMS eliminated the narrative statement from the Face-to-Face encounter documentation requirement effective January 2015, it did not recognize this in its so-called fraud data. We are concerned that a new “supporting documentation” requirement may continue and once again exacerbate fraud percentages.
In short, we do not see how blanket prior authorization will deter those who submit false documentation in order to defraud the program. We can clearly see, however, how such a process will hinder the provision of needed care.
As noted above, CMS has just implemented a prior authorization program for certain DMPEPOS items and the outcome of a prior power mobility demonstration call into question whether and how much medically necessary equipment was unnecessarily denied. Before implementing any additional prior authorization demonstrations, we urge CMS to assess how current prior authorization processes are working – or not working – for beneficiaries in other contexts, including backlogs caused by contractor reviews and the resulting delays and denials of services and equipment.
In an overreaching anti-fraud effort that appears anything but targeted, if implemented, this demonstration would undoubtedly negatively impact access to the home health benefit for many Medicare beneficiaries who live in the affected states. Requiring prior approval for every prospective home health recipient will effectively delay and deny home health coverage for countless Medicare beneficiaries, often when they are at their most medically vulnerable. They may have no alternative but to turn to institutional care. We therefore urge CMS to withdraw its proposed prior authorization demonstration.
The Center for Medicare Advocacy appreciates the opportunity to provide feedback on this proposed demonstration (CMS-10599). For further information please contact Center Senior Policy Attorney David Lipschutz, email@example.com.
Center for Medicare Advocacy
81 Fed Reg 6275 (February 5, 2016).
 “Supporting Statement Part A – Medicare Prior Authorization of Home Health Services Demonstration” CMS-10599 (February 5, 2016): https://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/Downloads/CMS-10599.zip.
 A Face-to-Face encounter must occur no more than 90 days prior to or within 30 days after the home health care start of care date. 42 C.F.R. §424.22(a)(1)(v). This proposal would create new (and exacerbate existing) insufficient documentation problems since current rules allow for collection of documentation after services begin.
 See , e.g,, the Center’s comments to a proposed home health rule (September 2015), available at: http://www.medicareadvocacy.org/comments-on-proposed-rules-cy-2016-home-health-prospective-payment-system-rate-update-home-health-value-based-purchasing-model-and-home-health-quality-reporting-requirements/.
 In an effort to address this ongoing misconduct, the Center and Vermont Legal Aid recently filed a Motion for Resolution of Non-Compliance with the Settlement Agreement in the landmark case, Jimmo v. Sebelius. See: http://www.medicareadvocacy.org/jimmo-motion-for-resolution-of-non-compliance/.
For further discussion of Medicare appeals, see, e.g., the Center’s Weekly Alert “Senate Finance Committee Holds Hearing on Medicare Appeals Backlog” (April 30, 2015), available at: http://www.medicareadvocacy.org/senate-finance-committee-holds-hearing-on-medicare-appeals-backlog-proposed-solutions-are-of-great-concern/.
 80 FR 81673 (December 30, 2015).
 For further discussion of the DMEPOS rule, see the Center’s Weekly Alert “CMS Final Rule for Prior Authorization Process for Certain DMEPOS” (January 6, 2016), available at: http://www.medicareadvocacy.org/cms-final-rule-for-prior-authorization-process-for-certain-durable-medical-equipment-prosthetics-orthotics-and-supplies-dmepos/.
 See 80 FR 81676 (December 30, 2015).
 See Medicare Benefits Policy Manual, Ch. 7, §18.104.22.168.