Medicare RAC Prepayment Review Demonstration Begins August 27

The Medicare Recovery Audit Contractor (RAC) Prepayment Review Demonstration program, designed to reduce fraud and abuse in Medicare Part B claims, will begin reviewing claims documentation and medical necessity determinations in up to eleven states prior to issuing payment beginning August 27th, 2012.  The program was scheduled to begin January 1, 2012 but was twice delayed. 

According to CMS, the demonstration project will target claims with historically high rates of improper payments and will apply to claims submitted  in seven states that have a high frequency of potentially fraudulent activities: California, Illinois, Louisiana, Florida, New York, Texas and Michigan.  The prepayment reviews will also focus on claims submitted in four additional states with a high rate of short inpatient hospital stays: Ohio, North Carolina, Pennsylvania and Missouri.

If you practice in these states listed above, be prepared to submit additional medical documentation upon request of the CMS contractors.  According to the CMS release, “additional documentation” could mean the following:

• 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.

More information on the Medicare RAC Prepayment Review Demonstration project can be found here.

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