When the Enrollment Freeze Ends, Claim Review Takes Over — Small Providers Need Clear Rules

For six months, Medicare’s main answer to home health and hospice fraud has been a closed door. On May 13, CMS stopped enrolling new hospices and home health agencies nationwide, along with new branch locations and certain ownership changes. A moratorium lasts six months unless CMS extends it, so the scheduled end is November 13..

CMS says the freeze is working. A senior official said this fall that about 250 home health agencies and 50 hospices were denied enrollment in the first five months. I believe it. But a closed door is a blunt tool, and it was never built to stay shut. What replaces it? Everything I’m seeing points to more claim review for the agencies already inside.

Where oversight is heading

On November 2, CMS announced plans to expand the home health Review Choice Demonstration (RCD) to California, starting with billing periods on or after January 18, 2027, pending approval of the paperwork package. California agencies will choose pre-claim or postpayment review between November 16 and December 16, with postpayment review as the default. California would join Illinois, Ohio, Texas, North Carolina, Florida and Oklahoma. An industry association leader told McKnight’s Home Care that CMS may use tools like RCD in place of the moratorium.

Hospice is headed the same way. In June, HHS’s Office of Inspector General estimated that Medicare could have saved $255.1 million on hospice services for certain new enrollees. In a sample of 100 initial certification periods, 45 didn’t meet Medicare requirements: 21 lacked clinical support for a terminal prognosis, and 24 had documentation problems. OIG recommended that contractors consider prepayment or postpayment review for this group, and CMS agreed.

The enrollment door may reopen. File review isn’t going anywhere. A moratorium is the time to get your house in order and make sure your policies line up with what your team actually does. That advice doesn’t expire on November 13.

Review can work, but the friction is real

Pre-claim review isn’t all bad. An agency gets an answer before it bills, not a clawback years later. CMS data for fiscal year 2024 show that 97% of home health pre-claim review requests in the demonstration states were affirmed. Agencies at a 90% affirmation rate can choose relief from most reviews, apart from spot checks.

Prior authorization should be treated like a free pre-audit. Every decision is a reviewer grading your documentation before you deliver, and CMS rewards good grades. It’s not a wall. It’s part of the process.

The same data show friction. Of claims that went through prepayment or postpayment review, 84.4% were approved. Of denied claims that were appealed, 51.6% were overturned at the first level, most often because of additional documentation that hadn’t been provided during the first review, according to CMS.

That’s the number I can’t get past. When half of appealed denials are reversed because a missing record finally shows up, clearer expectations up front could have saved everyone the work. It’s why it’s important to ask: does the chart support the claim? And when did someone last pull about 10 of your charts and check them against what got paid? A large health system absorbs an appeal as routine. For a small agency with a few office staff, every hour chasing a physician signature or a face-to-face note is an hour not spent on patients.

Who carries the risk

Fraud in these benefits is real, and oversight is warranted. But a lot of times people aren’t evil. Some of it is greed. A lot of it is someone rushing to get a business started and make money.

And expanded review doesn’t land evenly. Agencies with the least office capacity feel it first. If cash flow slows or denials stack up, some may get cautious about admitting complex patients, or close. The patients who lose out would be the ones hardest to serve in the first place.

I’m not against review. I want it to catch bad actors without wearing down good ones.

What would make expanded review fair

Start with documentation standards an agency can actually find. Owners should see in one place what a reviewer expects on homebound status, face-to-face encounters and terminal prognosis. Contractors already send each agency a decision letter with the reasons for a non-affirmation and offer education on errors, per the RCD operational guide. Those lessons should be public, so agencies learn before they submit, not after.

CMS could also add the top reasons for non-affirmations and denials, by state and contractor, to the yearly statistics it publishes. That would show whether problems cluster around certain documentation elements or contractors, and whether review is hitting high-risk providers or everyone.

And measure access right next to integrity. As RCD and hospice review expand, CMS should track whether patients wait longer for home health starts or hospice admissions, and report it. Savings from denied claims tell only half the story.

Owners have homework too. Compliance can’t be a binder that comes out once a year. It belongs in the weekly meeting, next to the KPIs. Keep a log of every review request and decision so you see your own patterns before a contractor does. That’s how you sleep at night when the next document request shows up.

A short window to weigh in

CMS is taking public comments on the California information collection through November 16.  If you want review that’s effective and fair, you have only days to say so. Enrollment freezes make headlines. The quieter rules that follow will shape care for years.

Author bio:

Jamie Davis, Esq., CIPP/US, CCEP, is a compliance and healthcare attorney whose work focuses on health care regulation and privacy. She is also an owner-operator in health care, so she lives under the same rules she writes about.

Photo: gustavofrazao, Getty Images