Pre-Claim Review, Postpayment Review, or Minimal Review With Payment Reduction: Choosing Your Home Health RCD Option

Every home health agency (HHA) in a Review Choice Demonstration (RCD) state must decide how it will prove compliance with Medicare home health requirements. For years, agencies weighed three initial options: Pre-Claim Review, Postpayment Review, and Minimal Review with a 25 percent payment reduction. Many agency leaders still search for guidance on all three.

The options have changed. When CMS extended RCD for five years effective June 1, 2024, it removed Minimal Review with a 25 percent payment reduction from the initial choices. Today, the current RCD Operational Guide lists two initial choices, Pre-Claim Review and Postpayment Review, with additional choices available to agencies that reach a 90 percent compliance threshold. A 25 percent payment reduction still exists, but in a different context: it applies to claims submitted under Pre-Claim Review without a pre-claim decision.

This article explains each option, what happened to the minimal review option, how the later choices work, the pros and cons of each path, and a framework for choosing. It applies to agencies in Illinois, Ohio, Texas, North Carolina, Florida, and Oklahoma, and to California agencies preparing for the demonstration's expansion. It is educational and does not replace legal or professional advice.

Overview of the Current Options

Initial Choices

• Choice 1: Pre-Claim Review.

• Choice 2: Postpayment Review.

Agencies that do not choose are placed in Choice 2.

Subsequent Choices for Agencies That Meet the Threshold

• Choice 1: Pre-Claim Review.

• Choice 3: Selective Postpayment Review.

• Choice 4: Spot Check Review.

Qualifying agencies that do not choose are placed in Choice 3 for the remainder of the demonstration, according to the Operational Guide.

Choice 1: Pre-Claim Review

How It Works

The HHA submits a pre-claim review request with supporting documentation for each 30-day billing period before submitting the final claim. Requests can be submitted after care begins. The MAC reviews the documentation and issues a decision within 10 business days, excluding federal holidays, for both initial requests and resubmissions.

Decisions may be:

• Provisionally affirmed, meaning the documentation appears to meet Medicare requirements.

• Partially affirmed.

• Non-affirmed, meaning requirements are not met. The HHA may correct the problem and resubmit, identifying the resubmission with the original Unique Tracking Number (UTN). The guide does not state a limit on resubmissions.

Each decision has a UTN that must be placed on the final claim, whether affirmed or non-affirmed.

Advantages

• Feedback before billing. Problems are found and fixed before the claim is paid.

• Protection from postpayment overpayments for affirmed claims, except for technical errors or information not available at the time of review.

• Predictability. Once affirmed, claims are generally paid as expected.

• Learning. Non-affirmation letters show exactly where documentation falls short.

Disadvantages

• Administrative work for every billing period.

• Possible delays in final claims while waiting for decisions or resubmissions.

• The 25 percent payment reduction if a final claim is submitted without a pre-claim decision. According to the guide, the claim is stopped for prepayment review and, if payable, reduced by 25 percent. The reduction cannot be appealed or passed to the beneficiary.

• Rejected requests, which are not reviewed and delay the process.

Best Fit

Pre-Claim Review often fits agencies that want certainty before billing, have or can build strong intake and documentation workflows, and have good relationships with certifying practitioners.

Choice 2: Postpayment Review

How It Works

The HHA submits claims as usual, and the MAC pays them. The MAC then sends an Additional Documentation Request (ADR) for each claim. The HHA has 45 days to submit records, and the MAC has 60 days to review and decide. Denied claims become overpayments recovered through the standard process, and the HHA keeps its appeal rights. If the HHA does not respond, the MAC issues a notice of overpayment and begins recovery.

Advantages

• Normal claim processing and cash flow at first.

• No need to wait for a decision before billing.

• Time to assemble complete documentation after payment.

Disadvantages

• An ADR for every claim, creating a high, constant workload.

• Risk of denials and recoupment after payment.

• Interest may accrue on overpayments that are not paid or appealed.

• Problems may be discovered only after many claims have been paid.

• Appeal deadlines to manage. Filing a redetermination within 30 days of the demand letter, and a reconsideration within 60 days of the redetermination decision, limits recoupment under 42 CFR 405.379.

Best Fit

Postpayment Review may fit agencies with strong cash reserves, highly reliable documentation, and a disciplined ADR process, or agencies concerned about delays in final claims.

Minimal Review With a 25 Percent Payment Reduction: What Happened

The Original Option

When RCD began in 2019, agencies could choose a third initial option: minimal review with a 25 percent payment reduction on all home health claims. Under this option, the agency was not subject to the demonstration's pre-claim or postpayment reviews for most claims, but every claim was paid at 75 percent of the normal amount. CMS's materials also noted that agencies choosing this option could be subject to review by Recovery Audit Contractors.

Why Some Agencies Chose It

A small number of agencies chose this option because they wanted to avoid the administrative burden of reviewing every claim. For most agencies, however, a permanent 25 percent reduction was too costly.

Removal in 2024

On May 17, 2024, CMS announced the five-year extension of RCD effective June 1, 2024, and removed this option from the initial choices. Agencies that had been in the minimal review option had to select Pre-Claim Review or Postpayment Review during a selection period from June 17 to July 1, 2024, with a cycle effective date of July 15, 2024. Agencies that did not choose were placed in Postpayment Review. The current Operational Guide notes that this option was removed and the remaining choices were renumbered.

A Note on Federal Register Language

CMS's information collection notices for the demonstration have continued to describe a general approach in which providers that do not participate in either review option may still furnish services and submit claims but receive a 25 percent payment reduction and may be subject to Recovery Audit Contractor review. However, CMS's current RCD web page and Operational Guide state that agencies that do not make an initial selection are placed in Postpayment Review. Agencies should rely on the current Operational Guide and their MAC's instructions and should not assume a minimal review option is available.

Where the 25 Percent Reduction Still Applies

Under the current guide, the 25 percent reduction applies when an agency in Pre-Claim Review submits a final claim without a pre-claim decision. This is an important reason to build billing edits that hold any claim without a UTN.

The 90 Percent Threshold

Performance is measured in six-month cycles. According to the Operational Guide, an agency becomes eligible for subsequent choices when it reaches a 90 percent or greater full provisional affirmation rate (Pre-Claim Review) or claim approval rate (Postpayment Review), based on at least 10 requests or claims in the cycle. Only fully affirmed pre-claim decisions count toward the affirmation rate. The MAC notifies agencies of their results within 30 days after the cycle ends. Agencies below 90 percent, or with fewer than 10 requests or claims, choose again from the initial options.

Choice 3: Selective Postpayment Review

How It Works

The agency submits claims normally. Every six months, the MAC selects a random sample of claims for postpayment review, based on the agency's claim volume in the prior six months.

Advantages

• Far fewer reviews than full Pre-Claim or Postpayment Review.

• Normal claim processing.

Considerations

• Sampled claims that are denied become overpayments.

• Agencies must maintain documentation quality, because sampled claims still must meet requirements.

• According to the guide, qualifying agencies that do not choose are placed in this option and remain there for the remainder of the demonstration.

Choice 4: Spot Check Review

How It Works

The MAC randomly selects 5 percent of submitted claims for prepayment review, based on the prior six months' volume. The agency must maintain a 90 percent claim approval rate to stay in this option.

Advantages

• Only a small share of claims is reviewed.

• Reviews occur before payment, avoiding postpayment overpayments for reviewed claims.

Considerations

• Agencies must continue to meet the 90 percent approval rate.

• Reviewed claims are held until decisions are made.

Comparing the Options

Administrative Burden

• Pre-Claim Review: a request for every billing period.

• Postpayment Review: an ADR for every claim.

• Selective Postpayment Review: periodic samples.

• Spot Check Review: 5 percent of claims.

Cash-Flow Effect

• Pre-Claim Review: possible delays before final claims.

• Postpayment Review: normal payment, with risk of recoupment.

• Selective Postpayment Review: normal payment, with risk on sampled claims.

• Spot Check Review: delays only on selected claims.

Overpayment Risk

• Pre-Claim Review: low for affirmed claims.

• Postpayment Review: higher, because errors are found after payment.

• Selective Postpayment Review: limited to sampled claims.

• Spot Check Review: low for reviewed claims.

Workload Estimates for Each Option

Understanding the workload helps agencies staff appropriately. Consider an agency that bills about 100 home health billing periods per month.

Under Pre-Claim Review

• About 100 pre-claim requests per month, each requiring the packet to be assembled, checked, and submitted.

• Additional work for each non-affirmation, including obtaining missing documentation and resubmitting.

• Tracking decisions and placing UTNs on claims.

Under Postpayment Review

• About 100 ADRs per month, each requiring the record to be assembled and submitted within 45 days.

• Tracking decisions and managing appeals and overpayments for denied claims.

• Monitoring demand letters and recoupment.

Under Selective Postpayment Review

• A sample of claims every six months, based on prior volume.

Under Spot Check Review

• About 5 claims per month selected for prepayment review.

These estimates show why reaching the 90 percent threshold matters: it can reduce review volume dramatically.

Financial Considerations in More Detail

The Cost of the Former Minimal Review Option

The former minimal review option cost agencies 25 percent of their home health revenue on every claim. For an agency with $5 million in annual Medicare home health revenue, that meant about $1.25 million per year in reduced payments. This helps explain why most agencies avoided the option and why its removal had limited effect for most providers.

The Cost of Pre-Claim Delays

Under Pre-Claim Review, the main financial risk is delay. If documentation is incomplete or a request is non-affirmed, the final claim may wait for a resubmission. Agencies should track the average days from start of care to an affirmed decision and from decision to payment.

The Cost of Postpayment Denials

Under Postpayment Review, the main financial risk is denial after payment. Denied claims become overpayments, interest may accrue if they are not paid or appealed, and recoupment can affect current cash flow. Agencies should track denial rates, appeal outcomes, and amounts recouped.

The Value of Reaching the Threshold

Agencies that reach 90 percent gain access to Selective Postpayment Review or Spot Check Review, which reduce administrative cost and financial uncertainty. Investing in documentation quality early often pays off over the life of the demonstration.

Beneficiary Protections Under Every Option

Whichever option an agency chooses, RCD is not intended to restrict access to medically necessary home health care. Services may begin before a pre-claim request is submitted, and the 25 percent reduction for claims submitted without a pre-claim decision cannot be passed on to the beneficiary. Agencies should continue to follow Medicare's beneficiary notice requirements and avoid delaying care because of administrative steps.

Who Should Be Involved in the Decision

• Agency administrator or executive director.

• Director of nursing or clinical manager.

• Intake manager.

• Billing and revenue cycle leadership.

• Compliance officer.

• Finance leadership.

• For larger organizations, the governing body or owners.

Each brings a different view of the operational, clinical, and financial impact.

Reselecting at the End of Each Cycle

At the end of each six-month cycle, the MAC notifies agencies of their results. Agencies should:

• Review the results carefully and confirm they match internal tracking.

• If eligible for subsequent choices, compare Pre-Claim Review, Selective Postpayment Review, and Spot Check Review.

• Make a selection within the window, which the Operational Guide states is about two weeks before a new cycle begins. If a qualifying agency does not choose, it is placed in Selective Postpayment Review for the rest of the demonstration.

• If not eligible, decide whether to stay in the current initial option or switch.

• Document the decision.

A Framework for Choosing

Step 1: Measure Your Documentation

Audit a random sample of recent billing periods against RCD requirements. Estimate how many would be fully affirmed.

Step 2: Assess Operational Capacity

Estimate the staff time needed to submit a pre-claim request for every billing period or to respond to an ADR for every claim.

Step 3: Model Cash Flow

Compare the effect of possible pre-claim delays with the effect of postpayment denials and recoupment.

Step 4: Evaluate Referral Sources

Consider how quickly certifying practitioners provide signed plans of care and face-to-face documentation.

Step 5: Consider Risk Tolerance

Decide whether you prefer to resolve problems before billing or after payment.

Step 6: Plan for the Threshold

Think about which option gives you the best chance of reaching 90 percent. Many agencies find that pre-claim feedback helps them improve faster, but each agency's situation differs.

Step 7: Document the Decision

Record the data, the decision, and who approved it, and revisit it at the end of each cycle.

Practical Safeguards for Each Option

For Pre-Claim Review

• Build a billing edit that holds any final claim without a UTN.

• Submit requests as soon as documentation is complete, rather than waiting until the end of the billing period.

• Check for other agencies serving the beneficiary to avoid rejections.

• Track every non-affirmation reason and share trends with clinical staff weekly.

For Postpayment Review

• Log every ADR on the day it arrives and calendar the 45-day due date.

• Submit records electronically and keep proof of submission.

• Calendar redetermination deadlines that protect against recoupment.

• Reserve cash for possible recoupment.

For Selective Postpayment and Spot Check Review

• Keep documentation quality high, because any claim may be selected.

• Continue internal audits to catch problems before reviewers do.

• Monitor approval rates closely under Spot Check Review to stay above 90 percent.

For All Options

• Keep Medicare enrollment and correspondence information current so notices reach the right people.

• Train new staff promptly on RCD processes.

• Report RCD results to leadership regularly.

Common Mistakes

• Assuming the minimal review option is still available.

• Defaulting to Postpayment Review by missing the selection window.

• Choosing an option without auditing documentation first.

• Submitting final claims without UTNs under Pre-Claim Review.

• Underestimating the ADR workload under Postpayment Review.

• Failing to track affirmation or approval rates during the cycle.

• Not reselecting when eligible for subsequent choices, and being placed in Selective Postpayment Review by default without considering Spot Check Review.

A Hypothetical Example

An Ohio agency that had chosen the minimal review option in 2019 had accepted a 25 percent reduction for years. When CMS removed the option in 2024, the agency had to choose between Pre-Claim Review and Postpayment Review. An internal audit showed that about 80 percent of its billing periods would likely be affirmed. The agency selected Pre-Claim Review, built new workflows, and focused on face-to-face documentation from its top referral sources. By its second cycle, it exceeded 90 percent, selected Spot Check Review, and began receiving full payment on its claims with far fewer reviews.

Frequently Asked Questions

Can I still choose minimal review with a 25 percent payment reduction?

No. CMS removed it from the initial choices in the 2024 extension.

What happens if I do not choose an option?

You are placed in Postpayment Review.

When does the 25 percent reduction apply now?

When an agency in Pre-Claim Review submits a final claim without a pre-claim decision.

How do I qualify for Selective Postpayment or Spot Check Review?

Reach a 90 percent or greater affirmation or claim approval rate, based on at least 10 requests or claims, in a six-month cycle.

Can I switch options?

Agencies choose at the end of each cycle based on whether they met the threshold.

Conclusion

Choosing an RCD option is one of the most important operational decisions a home health agency in a demonstration state makes. The minimal review option with a 25 percent payment reduction is no longer available as an initial choice, so agencies now choose between Pre-Claim Review and Postpayment Review, with Selective Postpayment Review and Spot Check Review available after reaching the 90 percent threshold. By auditing documentation, assessing capacity and cash flow, engaging referral sources, and choosing the path that gives the best chance of reaching the threshold, agencies can reduce their review burden over time.

How HealthBridge Can Help

HealthBridge is a healthcare management consulting firm that helps home health agencies evaluate RCD options, audit documentation, build pre-claim review and ADR workflows, track affirmation and approval rates, and prepare for each new cycle. If you need help choosing your RCD option, please get in touch with us. We will be happy to help you with this topic.

References

• Centers for Medicare & Medicaid Services. Review Choice Demonstration for Home Health Services. https://www.cms.gov/research-statistics-data-and-systems/monitoring-programs/medicare-ffs-compliance-programs/review-choice-demonstration/review-choice-demonstration-for-home-health-services

• Centers for Medicare & Medicaid Services. Review Choice Demonstration for Home Health Services Operational Guide. https://www.cms.gov/research-statistics-data-and-systems/monitoring-programs/medicare-ffs-compliance-programs/review-choice-demonstration/downloads/rcd-operational-guide.pdf

• Centers for Medicare & Medicaid Services. Review Choice Demonstration for Home Health Services Frequently Asked Questions. https://www.cms.gov/research-statistics-data-and-systems/monitoring-programs/medicare-ffs-compliance-programs/review-choice-demonstration/downloads/rcd-faqs.pdf

• U.S. Department of Health and Human Services. Guidance Portal: Review Choice Demonstration for Home Health Services. https://www.hhs.gov/guidance/document/review-choice-demonstration-home-health-services

• Federal Register Public Inspection. Agency Information Collection Activities: Review Choice Demonstration for Home Health Services, CMS-10599 (Document 2026-22297). https://public-inspection.federalregister.gov/2026-22297.pdf

• Centers for Medicare & Medicaid Services. Additional Documentation Request. https://www.cms.gov/data-research/monitoring-programs/medicare-fee-service-compliance-programs/medical-review-education/additional-documentation-request

• Electronic Code of Federal Regulations. 42 CFR 405.379, Limitation on Recoupment of Provider and Supplier Overpayments. https://www.ecfr.gov/current/title-42/section-405.379

• Centers for Medicare & Medicaid Services. Medicare Benefit Policy Manual, Chapter 7, Home Health Services. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/bp102c07.pdf