Now-Extended Review Choice Demonstration Forced Home Health Agencies To ‘Clean Up Their Act’

Last month, the Centers for Medicare & Medicaid Services (CMS) revealed that it planned to extend Review Choice Demonstration (RCD) for five additional years. This extension began on June 1. 

Though many home health providers had a bumpy start when RCD first launched, most of the industry has since adjusted. Some even view RCD as a positive.

Broadly, RCD is a CMS program that aims to reduce improper billing from home health providers, and limit fraud in the industry. Providers that operate in Illinois, Ohio, Texas, North Carolina, Florida and Oklahoma are subject to RCD.

In 2016, Illinois providers were subject to Pre-Claim Review Demonstration (PCRD). This was RCD’s predecessor.

“When [PCRD] was first unveiled, the Illinois home health agencies essentially said, ‘This is not what we want,’” National Association for Home Care & Hospice (NAHC) President William A. Dombi told Home Health Care News. “[Providers said], ‘It will be highly costly, from an administrative burden standpoint, and it has no redeeming value.’”

In 2017, lawmakers blocked the PCRD expansion.

“When the program was stopped, CMS went back to the drawing board, and created what’s now known as the Review Choice Demonstration program, where the provider had three options,” Dombi said.

These three options included: Choice 1, which is pre-claim review; Choice 2, which is post payment review and choice 3 which is minimal review with a 25% payment reduction. As part of this recent extension, CMS has eliminated choice 3.

After launching in Illinois, RCD expanded to Ohio, Texas, North Carolina and Florida, and then later to Oklahoma.

Dombi noted that providers operating in Illinois had a change of heart about RCD after a challenging start.

“It was a strange turnabout for them,” he said. “In retrospect, they’d realized that there was a lot of value to the RCD program for them after an initial burden that came with the startup of it. They particularly liked the fact that the program immunized them from retroactive audits on claims, which had plagued home health care for decades. A year, two years, sometimes three years after a claim was paid, Medicare was reopening claims, and saying ‘We want money back.’”

Providers in other states reported having a similar experience to Illinois agencies, which boiled down to a rocky start that later became manageable.

In general, providers also became more accustomed to the administrative requirements of the pre-claim review.

Some providers also think that the RCD program has benefited the industry. At-Home Health Care — Sparta Community Hospital’s home health segment — is one such company.

“I think it made agencies in Illinois clean up their act, per se,” At-Home Health Care Administrator Cheryl Adams told HHCN. “The documentation that CMS is requiring, Palmetto in particular, is nothing new, but agencies were not always following the rules. This just makes everyone more accountable.”

Sparta Community Hospital is located in Southern Illinois and is a 25-bed full-service acute care medical facility. At-Home Health Care is a Medicare-certified home health agency that serves five counties surrounding Sparta.

As a provider that operates in Illinois, At-Home Health Care was also part of the initial PRCD. When RCD began, the agency picked Choice 1.

“We felt that it was easier to do it upfront to make sure that we were capturing all the appropriate documentation that we needed, and that we would have an affirmed record at the beginning instead of waiting and having ADRs after,” Adams said. “Our practices will not change.”

Adams believes that At-Home Health Care has been successful under RCD because the agency already had good processes in place. It used the program as an opportunity to tighten up these processes.

Enhabit Inc. (NYSE: EHAB) is another company that is well prepared for this current iteration of RCD.

“We anticipated the demonstration would be extended, so we were not surprised by the announcement,” Bud Langham, executive vice president of clinical excellence and strategy at Enhabit, told HHCN in an email. “We have been participating in RCD and its predecessor program Pre-Claim Review almost from the beginning, so for us, it simply remains business as usual.”

Dallas-based Enhabit has 255 home health locations and 112 hospice locations across 34 states.

Langham thinks it’s unlikely that the elimination of Choice 3 will have any impact on the industry.

“Provider choices are not public, but our understanding is that very few providers selected this option,” he said. “We don’t expect this to have any material impact on the industry.”

Under the extension, providers will have to select from Choice 1 or 2. The process will begin on June 17. Providers who don’t make a selection will have to participate under Choice 2.

Langham noted that, overall, Enhabit is proud of its performance under the RCD program.

“It has required some investment and strategic focus, but we are pleased with our results,” he said.

Looking ahead, providers wondering if RCD will eventually expand to other states will still have to wait and see.

“CMS has some work to do before it decides to do that,” Dombi said. “It’s a labor intensive process for them, as well as it is for the home health agencies. Is there a point when they think they’ve reached enough success, in terms of complaint claims submissions, or is it something that should be even considered to be permanent, not just extended?”