How Home Health Agencies Can Survive the Review Choice Demonstration

Only 11 days stand between home health agencies and the launch of the dreaded Review Choice Demonstration (RCD) in Illinois. Having quality documentation processes in place and a strong electronic medical record (EMR) partner will be the keys to surviving the upcoming demo, experts caution.

But picking the right claims review option will also be critical to agencies’ RCD success.

“You have to have good processes in place, with staff buying into what you’re trying to accomplish,” Cheryl Adams, the home health administrator for Sparta Community Hospital, told Home Health Care News. “And you want to have a strong EMR, one that adapts to different regulation changes quickly without lagging behind.”


Announced last May by the Centers for Medicare & Medicaid Services (CMS), RCD is an updated version of the failed Pre-Claim Review Demonstration (PCRD) implemented in 2016, then paused less than two years later because of procedural problems and other hurdles.

Similar to PCRD, CMS’s RCD is meant to combat improper home health Medicare billing, which totaled at least $3.2 billion in 2018, according to the Government Accountability Office (GAO). Unlike the old demo, however, RCD affords home health agencies multiple options for how they can participate.

Under RCD, home health agencies will be able to pick between either pre-claim or post-payment review routes, in addition to a minimum review option that comes with a standard 25% payment reduction.


Ultimately, agencies with proven track records — or those that achieve a claims affirmation rate of 90% or higher — will also be able to choose from a selective post-payment review option and less-extensive spot check.

“We expect this demonstration to keep dollars in the Medicare program and away from unscrupulous providers,” CMS Administrator Seema Verma previously stated.

RCD officially kicks off in Illinois on June 1, at which point all newly initiated episodes of care will be subject to demo requirements. The start date is roughly six months later than what CMS had anticipated.

For the most part, Illinois providers are ready for RCD, Sara Ratcliffe, executive director of the Illinois Home Care and Hospice Council (IHHC) told HHCN.

“Many did not change their processes from the first Pre-Claim Review Demonstration, so the shift into RCD — especially if they chose [pre-claim review] — should be smoother than the first time around. However, RCD will take extra time regardless of which choice has been selected, and agencies would prefer not to be subject to the demonstration.”

Picking the right path

About 77% of Illinois home health providers are working with RCD under the full pre-claim review option, according to IHHC. Many were eligible for the subsequent set of choices due to strong compliance, leading to 22% of providers choosing the 5% spot check.

No Illinois home health providers chose the minimal review option with a payment reduction.

There are several reasons why agencies are overwhelmingly choosing pre-claim review, Ratcliffe said. Perhaps the biggest is the ability to make changes to potentially problematic claims early on — and the fact up-front affirmation means an agency will likely get paid.

Sparta Community Hospital’s home health agency — which Adams started more than 20 years ago as the result of her MBA business project — is among the group of Illinois providers to pick the pre-claim path. Based out of a critical access hospital (CAH), the relatively small agency has an average daily census of about 80 patients with roughly 70 admissions per month.

Included in the Bipartisan Budget Act of 1997, the CAH designation is designed to reduce the financial vulnerability of rural hospitals and improve access to health care by keeping essential services in rural communities. To do so, designated CAHs receive benefits such as cost-based reimbursement for Medicare services.

“With pre-claim review, you have the opportunity to fix the problem,” Adams said. “Under the spot check, it’s an [additional development request]. There’s no fixing. You submit that entire record, they have the opportunity to review that entire record.”

Palmetto GBA is the Medicare administrative contractor (MAC) tasked with overseeing claims review under RCD.

When PCRD was in effect, Adam’s home health agency achieved a 100% affirmation rate with no claims denials, she said. Additionally, the agency did not have to hire new staff to reinforce its operations, which some reported doing to keep up with new paperwork demands.

“It’s agencies being current with what’s going on in the industry and following the regulations,” Adams said. “If they’re doing that, they’re going to do fine in pre-claim review. It’s the same pieces of data or information under pre-claim than what you’re supposed to be collecting anyway.”

RCD uncertainty

Illinois is the first state to head into RCD come June 1. CMS later plans to expand the demo into Ohio, Florida, North Carolina and Texas. It’s unclear which states will follow the Prairie State, though some predict CMS will save Texas for last because of its home health market size.

“We are hoping for a smooth transition into RCD and will be working closely with Palmetto to make sure any problems are quickly addressed,” Ratcliffe said.

Apart from strengthening claims processes and leveraging EMR relationships, home health providers also should coordinate with their referral sources, letting them know what RCD requires of all parties involved.

“Have conversations with your referral sources and educate them on what the Review Choice Demonstration is,” Ratcliffe said. “Let them know that it is imperative that documentation be timely and accurate. Make sure that the entire home health agency is well aware of RCD and the choice that has been made. It is very important that all involved are well educated.”

RCD impacts only Illinois agencies next month, but providers everywhere should be paying close attention for survival tips.

About 54 home health agencies closed or exited the business during the 2016 PCRD period, with the volume of paid Medicare episodes declining by 17%.

Although her home health agency is prepared for RCD, Adams worries about how the demo will coexist with the Patient-Driven Groupings Model (PDGM) and its new 30-day billing period.

“It is going to be a challenge,” she said. “We still have yet to get an answer on how they’re going to play together. You have a 30-day billing cycle. How is RCD going to play into that? Are we going to submit [claims for review] every 30 days? They haven’t given us that answer yet. I would hope not.”

CMS estimates RCD would cost home health agencies in Illinois, Ohio, North Carolina, Florida and Texas about $24 million per year in extra administrative burden. If expanded to the entire Palmetto/JM jurisdiction, that cost would hit $40 million per year.

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