CMS Announces Delay to Recovery Audit Prepayment Review Demonstration

The Centers for Medicare and Medicaid Services (CMS) has announced the delay of a demonstration project designed to increase the amount of prepayment reviews done on Medicare Part A and B claims. The Recovery Audit Prepayment Review Demonstration, which was delayed from an initial January 1, 2012 start date, is expected to move forward on or after June 1, 2012. RAC’s will supplement the MAC’s prepayment review efforts in the following states (FL, CA, MI, TX, NY, LA, IL, PA, OH, NC, and MO).  Additional information on what items related to O&P that will be targeted as part of this effort will be forthcoming from OPGA.  Below is part of the expanded explaination from CMS about the recovery audit prepayment review program, what it will cover and who will likely be affected.


Recovery Audit Prepayment Review which will allow Medicare Recovery Auditors (RACs) to Review Claims on a Pre-Payment Basis

A claim can be reviewed by a variety of review entities to determine proper payment. The MACs and the ACs review claims on a prepayment basis to confirm the medical necessity of the billed item or service. The ZPICs and PSCs also review provider/supplier claims on a prepayment basis when there is suspicion of fraudulent activity. CMS will now be piloting using Recovery Auditors to increase the number of prepayment reviews performed in order to limit vulnerabilities in FL, CA, MI, TX, NY, LA, IL, PA, OH, NC, and MO. All these contractors will work in concert to review vulnerable areas of the Medicare Program in order to limit improper payments or fraud.

Prepayment complex medical review determinations require the reviewer to make a clinical or other judgment about whether an item or service is covered (i.e. meet the criteria of a Medicare benefit category, are not statutory excluded, and are reasonable and necessary), properly coded and compliant with documentation rules. In order for this determination to be made, the provider or supplier must submit a copy of the medical records to support the item/service. In prepayment complex medical review, the provider/supplier submits documentation for review after the claim has been submitted for payment but before payment has been made.

The contractors employ data analysis procedures to identify claims that may be billed inappropriately. These procedures are discussed in the Program Integrity Manual and may be based on claims data (national and/or local), beneficiary complaints, or data from other organizations (for example, Office of Inspector General and Government Accountability Office). When a contractor identifies a likelihood of sustained or high level of payment error, the contractor may request supporting medical record documentation. Examples that signify a likelihood of a high level of payment error are dramatic change in the frequency of use, high cost, high risk problem-prone areas, or unexplained increases in volume when compared to historical or peer trends.

For this information collection, CMS and its agents request additional documentation, including medical records, to support the claim. As discussed in more detail in Chapter 3 of the Program Integrity Manual, additional documentation includes any medical documentation, beyond what is included on the face of the claim that supports the item or service that is billed. For Medicare to consider coverage and payment for any item or service, the information submitted by the provider or supplier (e.g., claims) must be supported by the documentation in the patient’s medical records. The term “additional documentation” refers to medical documentation and other documents such as supplier/lab/ambulance notes and includes:

• Clinical evaluations, physician evaluations, consultations, progress notes, physician’s office records, hospital records, nursing home records, home health agency records, records from other healthcare professionals and test reports. This documentation is maintained by the physician and/or provider.

• Supplier/lab/ambulance notes include all documents that are submitted by suppliers, labs, and ambulance companies in support of the claim (e.g., Certificates of Medical Necessity, supplier records of a home assessment for a power wheelchair).

• Other documents include any records needed from a biller in order to conduct a review and reach a conclusion about the claim.

When conducting complex medical review the contractor specifies documentation they require in accordance with Medicare’s rules and policies. In addition, providers and suppliers may supply additional documentation not explicitly listed by the contractor. This supporting information may be requested by CMS and its agents on a routine basis in instances where diagnoses on a claim do not clearly indicate medical necessity, or if there is a suspicion of fraud.

This entry was posted in Orthotics and Prosthetics, Prosthetist, re provider, Regulatory and tagged , , , , . Bookmark the permalink.

One Response to CMS Announces Delay to Recovery Audit Prepayment Review Demonstration

  1. Pingback: Medicare RAC Prepayment Review Demonstration Begins August 27 | OPGA Blog

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