Increased Denials of Home Health Claims During 1986 and 1987

HRD-90-14BR: Published: Jan 24, 1990. Publicly Released: Jan 24, 1990.

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Pursuant to a congressional request, GAO reviewed increases in Medicare home health care claim denials during 1986 and 1987, focusing on: (1) reasons for the increased denials; (2) the extent that denial rates varied among regions and the causes of those variances; (3) how many home care agencies lost their liability waivers; and (4) how increased denials have affected the appeals process.

GAO found that increased home health claims denials in 1986 and 1987 were caused primarily by: (1) an increase in claims subjected to detailed review; (2) more detailed medical information forms and increased rejections based on incomplete forms; (3) reorganization of home health agencies' claims payment activities under 10 regional intermediaries with differing review practices; and (4) the Health Care Financing Administration's (HCFA) evaluation of the 10 regional intermediaries' review procedures prior to reorganization. GAO also found that: (1) inconsistencies in intermediaries' review practices caused regional variations in denial rates; (2) 32 percent of agencies lost their liability waivers in the last quarter of 1986, compared to 16 percent in the first quarter, and regional intermediaries inconsistently granted the waivers; (3) denied claims appeals increased from about 10,000 in 1986 to about 64,000 in 1988; (4) HCFA implemented certain measures that decreased claims denials, regional variations, and liability waiver losses; and (5) Congress passed legislation providing HCFA with specific guidelines for administering and increasing home health care benefits, but later repealed some provisions.

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