CMS is moving forward with plans to expand its Review Choice Demonstration (RCD) to California home health agencies, with implementation targeted for January 18, 2027. CMS is expanding the demonstration in response to Medicare fraud concerns in California.
The RCD is a Medicare initiative designed to strengthen program integrity and prevent improper payments through additional reviews of home health claims. The demonstration is already in place in five states: Illinois, Ohio, North Carolina, Florida, and Texas.
The proposed expansion would apply to all California home health agencies billing through Medicare Administrative Contractor (MAC) Jurisdiction 6, serviced by Wellpoint Federal. However, implementation is not yet finalized. CMS is currently seeking approval from the Office of Management and Budget (OMB) for the revised information collection requirements necessary to move forward with the expansion.
What Are the Proposed Review Options?
Under the proposed expansion, California HHAs would initially have two review options:
- Pre-Claim Review: Agencies submit their claims for review before receiving payment. CMS evaluates whether the services meet Medicare coverage requirements before the claims are processed for payment.
- Post-Payment Review: Agencies receive payment first, but their claims are reviewed afterward to verify that the services were medically necessary and properly documented.
Agencies that do not select a review option during the designated selection period would automatically be assigned to post-payment review.
Proposed Implementation Timeline
Subject to OMB approval, CMS has outlined the following schedule:
- November 16, 2026: Selection period begins.
- December 16, 2026: Selection period ends.
- January 18, 2027: Target start date for the demonstration, covering applicable billing periods beginning on or after this date.
What This Means for HHAs?
The proposed expansion remains subject to OMB approval. CMS has requested expedited clearance, citing the need to address ongoing fraud concerns in California’s home health sector. California HHAs should monitor official CMS announcements for further updates.
Although the proposed expansion directly affects California HHAs, agencies in other states should also take note. The continued expansion of the RCD reflects CMS’s broader efforts to strengthen Medicare oversight and address improper payments in home health services.
Regardless of whether an agency is currently subject to the demonstration, maintaining accurate, complete, and well-supported documentation remains essential.
Learn more: CMS announcement on RCD expansion to California >
