Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Policy & Regulation News

CMS Changes Medicare and Medicaid Audit Process

By Stephanie Reardon

CMS paid nearly $4 billion in improper Medicare payments.

- The Centers for Medicare & Medicaid Services (CMS) announced that it has expanded its contracts to four different companies – HealthDataInsights, CGI Federal, Connolly and Performant Recovery to handle their recovery audit process. The organizations will be tasked with aiding the CMS in discovering and amending improper payments. This process is important because CMS paid nearly $4 billion in improper Medicare payments according to the 2013 Improper Payment Report.

With the new contract, CMS also analyzed provider’s concerns about the Medicare and Medicaid auditing process in three specific areas – provider burden, enhancing CMS’ oversight and increasing transparency – and has announced several changes to the process to address them.

Easing the provider burden

Providers have voiced multiple concerns with the additional development requests (ADRs). Currently, ADR limits are not adjusted based on compliance with Medicare rules and all providers have the same guidelines. CMS will now adjust ADR limits based on a provider’s Medicare compliance. For example, if a provider has low denial rates, it will have a lower ADR rate. The limits will be changed to ensure Medicare rule compliance.

Providers also worried over the additional documentation request limits not taking into account the differences in the departments within a facility. As such, a provider with multiple claim types could be impacted more than needed.

To prevent the possibility of this problem, CMS will establish diversified documentation request limits across all claim types within each facility which will guarantee that a provider with multiple claim types is not disproportionately impacted by recovery audits.

Providers also expressed multiple compliance concerns in regard to these audits. Currently, hospitals only have one year to submit a claim from date of service, but the auditors have a three year review period. With these changes,CMS will limit the auditor review period to six months in cases where providers submit the claim within three months of the date of service.

Physicians and medical facilities currently face a 60 day-wait prior for result notification of their audit. With the change in contract, CMS will limit recovery auditors to 30 days to complete complex reviews and inform physicians and facilities of their results. CMS will also require recovery auditors to confirm receipt of a physician’s correspondence within three business days.

Addressing CMS oversight

Another area where physicians expressed concern is CMS oversight, which the changes address. At present, even if the provider appeals a recoupment of improper fees, auditors are still paid their contingency fees. This process has been revamped. Now, until the second level of appeal is completed, auditors will not receive their contingency fees.

CMS will also look to address provider concerns on the way its auditing process is run. One of the biggest concerns that providers brought to light, was that recovery auditors were not penalized for having high appeal overturn rates. In response, CMS will require recovery auditors to keep their overturn rate to less than 10 percent during the first appeal level. If an auditor fails to meet this percentage rate, CMS will put the auditor on a corrective action plan that may involve lowering the ADR limits, or stopping specific types of reviews until the issue is corrected.

Then there are concerns over the accuracy rates of auditors, as they are not presently reprimanded for poor accuracy rates. The CMS plans to change this, and will require recovery auditors to have an accuracy rate of at least 95 percent. If the auditor does not meet this requirement, then the CMS will progressively reduce ADR limits. The CMS also plans to improve the review process and will hold all auditors accountable for their work.

Improving program transparency

Physicians are unclear on who they should contact with complaints or problems which may come up. To clarify, CMS has established a provider relations coordinator to help providers resolve these issues. Providers will receive specific contact information to reach out for help.

CMS will also help providers better understand the recovery auditor new issue website postings. CMS will require auditors to give more uniform and specific review information to their websites for providers to better understand and work the website.

With every new contract, CMS anticipates an improved program and greater provider satisfaction.



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