Home Health & Hospice Week

Slowed cash flow poised to close more doors.

The other shoe is finally dropping for the Review Choice Demonstration — and it may smash home health agencies in RCD states.

After initially announcing that it would begin RCD in Illinois in December, the Centers for Medicare & Medicaid Services has finally set a June 1 launch date for the medical review program that takes over from the halted Pre-Claim Review demonstration. CMS was able to nail down the implementation date because the Office of Management and Budget granted Paperwork Reduction Act approval for the program after a longer-than-expected wait.

Ahead of the June 1 start date, home health agencies in Illinois will have from April 17 to May 16 to choose which of the program’s three review options they want to use — pre-claim, postpayment, or “minimal postpayment review with a 25% payment reduction.” (See more details about each option in Eli’s HCW, Vol. XXVII, No. 35.)

Advanced options: HHAs that achieve a 90 percent or higher “affirmation” rate after the first six months will get to choose from two further options — “selective” postpay review or “spot check” review. The former reviews “a statistically valid random sample of claims” while the latter reviews “a random sample of 5 percent of a HHA’s submitted claims,” according to the RCD Operational Guide updated April 3. HHAs have to maintain their 90 percent affirmation rate to stay in those categories.

Illinois agencies that achieved a 90 percent affirmation rate under the old PCR demo, which was halted in 2017, are in a unique position of being able to go straight to the advanced options. HHAs in the subsequent demo states of Florida, Texas, Ohio, and North Carolina won’t have that choice.

New, Small HHAs Hit Hardest

The long-delayed onset of RCD is “bad news for HHAs,” judges Sandy McCleve of Advantage Healthcare Consulting Cost Report & Reimbursement in North Salt Lake, Utah. The demo’s intensive review will “mean it will take a long time for agencies to receive payment for claims,” having a negative effect on cash flow.

“In an industry where cash flow is key, [RCD] is not a good thing,” McCleve warns.

“No matter which choice is selected, there will be cash flow slow-downs or reductions,” cautions Joe Osentoski with Quality In Real Time in Troy, Michigan. “I believe every Illinois agency will suffer some effect of RCD.”

But the impact will be particularly hard on “smaller agencies and new agencies who may not have experienced the prior Pre-Claim Review Demonstration activity,” Osentoski tells Eli. The same goes for HHAs that have “had staff turnover since then, and so any prior experience is lost,” he adds. “The value of prior PCRD experience is balanced by the re-learning curve of the RCD experience.”

Good news: One bright spot “is that there’s still a little time before it starts on June 1,” highlights reimbursement expert M. Aaron Little with BKD in Springfield, Missouri.

Note: CMS’s RCD webpage, including a link to the Operational Guide, is at www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Review-Choice-Demonstration/Review-Choice-Demonstration-for-Home-Health-Services.html.