CMS's Review Choice Demonstration (RCD) puts every home health claim in six states through one of two review tracks, and the track an agency selects shapes its Medicare cash flow for the next six months. An agency that does not actively choose defaults into Choice 2: Postpayment Review, where the claim is paid first and pulled for a full record review afterward, and a missed response to the resulting Additional Documentation Request (ADR) converts an otherwise payable claim into an overpayment notice. CMS extended RCD for five more years effective June 1, 2024, and the choice an agency makes on day one carries into its exposure to recoupment for years after.
The Two Initial Review Choices
Home health agencies in the demonstration states choose between two tracks at the outset. Choice 1: Pre-Claim Review submits every billing period for review before the final claim, allows unlimited resubmission if CMS does not affirm the request the first time, and shields a provisionally affirmed claim from further medical review except in limited circumstances. Choice 2: Postpayment Review functions like a traditional RAC audit, where the claim is paid and then pulled for records through an ADR, with an overpayment notice if the agency does not respond. A third initial option, Minimal Review with a 25% payment reduction, was removed from the initial choices in the 2024 extension.
Clearing the 90% Threshold
Every six months, the Medicare Administrative Contractor running RCD calculates the agency's affirmation or approval rate and notifies the agency within 30 days of the cycle's close. An agency that clears a 90% target on a minimum of 10 submitted requests or claims earns the right to choose among three lighter tracks: continuing Pre-Claim Review, Choice 3: Selective Postpayment Review, a random sample pulled every six months and the default if no subsequent choice is made, or Choice 4: Spot Check Review, where the MAC reviews a random 5% of claims before payment, sized to the agency's claim volume over the prior six months. An agency that picks Selective Postpayment Review stays there for the rest of the demonstration regardless of later performance; Spot Check Review requires clearing the threshold again every cycle.
The Consequence of Missing the Target
CMS answers the miss scenario directly in its own FAQ for the demonstration: an agency whose rate falls below 90%, or that submits fewer than 10 requests or claims in the cycle, must choose again from the two initial options. Missing the target costs the agency another full-review cycle, not a harsher one. Every claim in that cycle stays exposed to a recoupment demand if the records do not support the billed services, and a sample-based review that turns up noncompliance can still support an extrapolated overpayment projected across the full claim universe, but only where CMS finds a sustained or high level of payment error or that documented education failed to correct it. Whether the right next step is a correction to a paid claim or a dispute over medical necessity is exactly the question Medicare Claim Reopenings Versus Appeals: Which Route Applies answers.
Where RCD Operates Now
RCD currently runs in six states: Illinois, Ohio, Texas, North Carolina, Florida and Oklahoma. The 2024 extension kept that six-state footprint through at least 2029. A home health agency licensed in one of these states cannot opt out of the demonstration, and whichever track applies, a local coverage determination still governs whether the service was medically necessary and covered, independent of which RCD choice the claim went through. RCD sits inside the broader Medicare audit defense landscape home health agencies face alongside RAC and UPIC review of other claim types.
Missing the 90% threshold returns the agency to the same cycle, under the same track, with the same exposure.
Why Early Legal Counsel Is Critical
It is critical that home health agencies promptly retain experienced healthcare defense counsel when an ADR, a non-affirmed pre-claim decision, or a cycle notice puts the agency's review track at risk. Early legal intervention can protect the agency's appeal rights, ensure the records submitted answer what the reviewer requested, keep a response from conceding more than the file supports, and position the next cycle's selection before the current one closes. Delaying representation into the appeal stage can leave an agency litigating a demand that earlier counsel could have kept off the record, particularly once a sample-based finding becomes an extrapolated projection, a process Challenging Extrapolation in Medicare Overpayment Demands and The Five Levels of Medicare Overpayment Appeals both cover.
How Health Law Alliance Can Help
Health Law Alliance's attorneys have overseen 2,000+ audits and handled 5,000+ matters, with 25+ years of experience. If your home health agency is navigating a Pre-Claim Review denial, a Postpayment Review ADR, or a cycle notice that missed the 90% target, contact Health Law Alliance's hospice and home health audit defense attorneys for a free, confidential consultation.
