CMS Fails to Start Home Health Review Choice Demo as Scheduled

The Centers for Medicare & Medicaid Services (CMS) did not meet its publicly announced Monday goal of launching the Review Choice Demonstration (RCD) in Illinois.

RCD is a revamped version of CMS’ widely opposed Pre-Claim Review Demonstration (PCRD) from 2016, an initiative that required home health providers to send in their Medicare claims earlier in the care process to avoid improper payments. Largely due to processing inconsistencies, Congressional criticism and industry backlash, PCRD was ultimately put on hold.

CMS revised PCRD as the five-year RCD demonstration in May. The re-booted program was slated to begin with home health agencies in Illinois, Ohio, North Carolina, Texas and Florida.


CMS previously told providers that RCD would begin Dec. 10 in Illinois.

It is now unclear when RCD will take effect.

“[CMS] is continuing the process for Paperwork Reduction Act approval for the Review Choice Demonstration for Home Health Services,” CMS wrote Monday on the agency’s RCD update page. “After PRA approval is received, we will update this website with the final, approved demonstration information, including a start date for home health agencies in Illinois and instructions on the choice selection process. CMS will provide notice on this website before phasing in the other demonstration states: Ohio, North Carolina, Florida, and Texas.”


Despite the delay and unexpected uncertainty, home health providers in Illinois should still prepare for RCD to make sure their operations don’t suffer future setbacks, National Association for Home Care & Hospice (NAHC) President Bill Dombi told Home Health Care News.

“We recommend that home health agencies in Illinois stay prepared for RCD,” Dombi said. “Doing so helps ensure claims compliance not matter what claim review actions CMS ultimately undertakes. We would recommend that all home health agencies take on a similar mindset as claims reviews will not go away even if RCD does not move forward.”

CMS delay ‘not a surprise’

Home health agencies operating in RCD states for the first time will have three main options for claims review and approval. Those options include a 100% pre-claim review, a 100% post-payment review and a minimal review option that includes a 25% payment reduction.

Additional options are available for agencies that display a high compliance rate over time, as well as for agencies that previously succeeded under PCRD in Illinois.

The fact that RCD failed to start on Monday was not a surprise, Sara Ratcliffe, executive director of Illinois HomeCare & Hospice Council (IHHC), told HHCN. CMS previously told IHHC that agencies would have at least two weeks before RCD implementation to decide on how they want to participate, she said.

“The RCD portal has not yet been opened for agencies to make their choices, so it is not a huge surprise that today is not the RCD start date,” Ratcliffe said.

PCRD and RCD are meant to reduce instances of improper billing throughout the home health care industry, a rate that has been has high as 59% in the past. Improper payment rates dropped sharply in 2017, however.

Home health corrective actions resulted in a $6.92 billion decrease in estimated improper payments from 2015 to 2018, according to a recent CMS report. Overall, the home health improper payment rate decreased to 17.61% in 2018 — a projected $3.2 billion.

“We hope that [the Office of Management and Budget] has not yet approved the RCD demo because it is taking seriously the improvement in the ‘improper payment rate’ going down to 17% as a strong indication that RCD and its $400 million price tag is not the smart way to go,” Dombi said. “NAHC contacted OMB and CMS leadership immediately after the new improper payment rate report came out explaining that the improvements were nationwide, and due to home health agency and CMS actions that were effective, efficient and without disruptive administrative burdens.”

Although RCD is set to take effect in Illinois first, CMS data shows Illinois is far from the top in terms of improper payments. Texas, New York, Oklahoma and Indiana all had higher improper payment rates in 2018. While Illinois’ was 18.4%, for example, Oklahoma’s was 23.4%, the highest in the United States.

New Jersey had the lowest improper payment rate in 2018, according to CMS data.

Under RCD, Illinois providers who participated in the original PCRD and met a 90% compliance — or affirmation — rate under CMS’ desired conditions can forgo pre- or post-payment review in favor of a spot-check review of 5% of claims on a biannual basis.

“Having been through the gauntlet has given us the knowledge and experience of where the pitfalls lie, make corrections to our previous processes,” Marvin Javellana, CEO of Illinois-based Better Care Home Health, told HHCN. “We have been operating under our new RCD process for more than a month and tweaking it along the way. Our staff is confident that we have this sorted out, and I believe them.”

Among all types of Medicare-reimbursed health care providers, insufficient documentation is the most common reason for improper payments, as defined by CMS. Medical necessity is the second most common reason.

Written by Robert Holly

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