COVID-19 has triggered fundamental shifts in the healthcare regulatory landscape. In response to this public health emergency, the Centers for Medicare & Medicaid Support Services (CMS) issued new guidance that includes loosening the restrictions on healthcare providers, expanding the role of non-clinical staff for home health agencies (HH) and skilled nursing facilities (SNF), and cutting many restrictions on providing telehealth care. All of these changes are expected to remove some regulatory burdens on healthcare providers and enable more patients afflicted by COVID-19 to receive critically needed care. Although they are just in place during the health emergency, there is reason to believe some changes will be enduring.

Responding to change is hard enough in the best of times – and even harder during a pandemic. Payers should recognize that this new environment will create a host of challenges, including unexpected utilization patterns, and possibly insufficient documentation. They need to consider immediate actions, prepare for what will happen as restrictions are lifted, and also build capabilities to address longer term impacts. One of the key tools payers should leverage is analytics, which can help payers identify providers with aberrant treatment patterns, instances where care might not have been appropriate, and if all the necessary rules were followed. Such data-powered insights can give payers the information they need to prevent payment errors, improve payment integrity, and reduce fraud, waste, and abuse (FWA).

Revised Provider Requirements

Demand for COVID-19 related care has skyrocketed, causing hospitals to work to clear beds and move patients to alternate care settings including home health, telehealth and SNFs. As virus hotspots spring up around the country, CMS has relaxed and expedited its process to enroll new providers. Some states have also eased their licensure requirements, allowing providers to practice in additional states.

While these changes increased the number of providers available to respond to coronavirus outbreaks, they also elevate risks. There is the chance that providers on a CMS exclusion or watch list or that should not be admitted as a Medicare provider for other reasons may be approved under the expedited enrollment process. Such unscrupulous providers can be expected to attempt to exploit the relaxed regulations, increasing overpayments.

Suspending the Three-Day Rule and Easing Recertification Requirements

In another significant shift in regulations, CMS removed the three-day rule for SNF care and allowed SNF care to be extended beyond the standard 60 day maximum. Under standard Medicare guidelines, patients can only be admitted to a SNF after a medically necessary three-day inpatient hospital stay, and must be transitioned out after 60 days. CMS removed these requirements to help hospitals clear their beds faster and expand their capacity to treat COVID-19 patients. These changes, however, increase the risk that patients will be sent to, and remain in, a SNF even though they don’t initially or later require the high level of skilled care provided at such a facility. Instead, patients who only require maintenance care, which is not covered by Medicare or could be treated in a less intensive setting such as their home, may be treated in a SNF setting.

Loosened SNF and Home Health Guidelines

During this crisis, various other regulations governing the kind of care that can be provided in home health agencies and SNF environments, as well as who can approve and document this care, have become looser. Several key measures designed to ensure care in the home is required and appropriate have also been adjusted. Protocols mandating physicians have a face-to face encounter with a patient before care begins have been relaxed. While such changes reduced the need for vulnerable members to risk going to their physician’s office, it raises some worrying prospects. Patients may receive various forms of needless care, or a patient’s condition may even worsen without correct supervision, leading to an increase in serious illnesses requiring critical care.

The scope of staff that can document care has also been expanded for both home health care and SNFs. Previously, a clinician had to review and approve the services ordered to ensure they were clinically necessary and appropriate. Now, lower level staff, often the same staff that renders the care (who may have potential conflicting motives) are able to perform this same task. Removing this restriction could cause care that’s not medically necessary to be provided for longer than required, creating the opportunity for payment errors.

Expanded Telehealth Services

Before COVID-19, physicians faced substantial limitations on telehealth services. Some care was not permitted or reimbursed at all, and other care was regulated by strict rules, such as requirements to be in an office and use specific technology. These restrictions limited providers from providing telehealth care. Payment was also typically substantially lower. Now, these same services can be delivered over the phone or through multiple apps, and can be provided from anywhere in the world at the same payment rates that applied previously to in office care.

This expansion was certainly necessary to optimize social distancing, but it does raise its own set of issues. The relaxation of where, how, and what technology is leveraged substantially increases the need for strong policies and protocols to ensure care delivery via telehealth is appropriate and paid correctly.

There’s also the chance for an increase in fraud, waste and abuse. First, some providers will bill a telemedicine visit, when in fact, it may be part of their overall ongoing care of the patient. Also, when billing for telehealth, providers classify the care into one of three tiers, depending on the level of care delivered. There may be a bias for some practitioners to over-code their telehealth interactions to get the highest level of reimbursement.

Various Timeframes to Consider

In the immediate term, everyone in healthcare is dealing with massive changes – extreme conditions in hot spots with many high risk cases, and cessation of virtually all care in many others. At this point, claims volumes have dropped, and payers have removed controls like prior authorization, and also agreed to cover various COVID-19 related services without member cost share. In that environment, pure fraud – such as providers submitting bills for care that never happened and other practices – is likely the biggest risk.

In the medium term, new challenges will arise as governments begin to relax restrictions, elective care can resume, and patients can consider going to their doctor. Here, there will be spikes in demand, as stressed systems will be still dealing with COVID-19 cases but also wanting and needing to provide care that is essential to patients as well as to the provider’s continued financial and operational health. Fraud risks will remain a top concern, but there will also be many instances of increased error in documentation and coding, as staff have moved into new functions as people left or were redeployed. And the risk of financial pressure for providers to “push the envelope” in billing will lead to patterns of abuse.

In some ways, the long term is the most difficult timeframe for which to prepare. One might expect that many things will return to pre-COVID-19 patterns, but there are substantial questions about when that will occur. Also, given the continued risks, market disruptions, and new engagement patterns that developed during the pandemic, the future may look very different than we expect. There are some things we do know – telemedicine is likely here to stay, large swaths of the population deferred care for at least several months may lead to increased future risk, many providers will be under substantial financial pressure, and with rising unemployment, coverage, income, ability to pay, and other factors will change for much of the population.

Combatting the Risks with Analytics

Relaxing regulatory restrictions has been a necessary step in the response to the pandemic. However, this new environment will make it difficult for healthcare payers to identify specific problematic treatments, claims and other areas of risk. Also, as the world tries to return to normal, there will be various other pressures on the system that raise concerns for payers.

The key is being able to see these new problematic patterns and issues. Analytics can provide the insights needed to overcome these obstacles. By examining data for outliers, such as SNFs taking large numbers of patients who have not had a precursor three-day stay for extended treatment in SNFs or at home, or suddenly billing for novel services, payers can take actions to mediate and prevent these threats. Time based models and spot audits in areas such as physicians overbilling for telehealth services, SNF care, and HH treatment can also validate whether the services being provided are appropriate.

As we move into the medium and longer term, analytics-driven insights will deliver substantial value in allowing payers to better prepare and respond to the unique challenges created by COVID-19. It enables payers to determine whether the claims they receive were appropriate, which providers followed all the necessary rules even in their adjusted form, the members receiving unusual and potentially problematic care, and where the highest risks to payment integrity exist.

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