Home Town Health Monthly RAC Update November 11, 2015

Agenda Recovery Audit Medicare FFY 2014 Recent CMS Updates RAC Program Improvements December 14, effective with new RACS More Audit changes…

Recovery Audit Medicare FFY 2014 In Fiscal Year (FY) 2014, Recovery Auditors collectively identified and corrected 1,117,057 claims for improper payments that resulted in $2.57 billion dollars in improper payments being corrected. The total corrections identified include $2.39 billion in overpayments collected and $173.1 million in underpayments repaid to providers. After taking into consideration all costs of the program, including contingency fees, administrative costs, and amounts overturned on appeal, the Medicare FFS Recovery Audit Program returned over $1.6 billion to the Medicare Trust Funds.

Recent CMS Updates November 6, 2015 – The Requests for Proposals (RFPs) for the next round of Recovery Auditor contracts were released today at the Federal Business Opportunity website fbo.gov. As CMS continues the procurement process for the next round of Recovery Auditor contracts, it is important that CMS begin to close out the current contracts so the Recovery Auditors can complete all outstanding claim reviews and other processes by December 31, 2015, the end date of the current contracts.

Recent CMS Updates CMS is also pursuing contract modifications to the current Recovery Auditor contracts to allow each of the four existing Recovery Auditors to continue recovery auditing activities through July 31, 2016. October 16, 2015 was the last day these Recovery Auditors could send Additional Documentation Requests (ADRs). December 31, 2015 will be the last day these Recovery Auditors could send an improper payment file to the Medicare Administrative Contractor (MAC) for adjustment.

Recent CMS Updates Recovery Auditors may resume recovery auditing activities, including sending ADRs, upon signing the contract modification. Regions A and D may continue sending ADRs. CMS has also posted an updated document showing the status of the enhancements made to Recovery Audit Program. One of the enhancements is a new method for calculating ADR limits for institutional providers (inpatient and outpatient hospitals, skilled nursing facilities, etc.).

Recent CMS Updates July 10, 2015 – In mid-January 2015, CMS approved the Recovery Auditors to begin reviewing Outpatient Therapy Threshold claims (those over the $3700 threshold) that were paid March 1, 2014 through December 31, 2014. In an effort to minimize provider burden, CMS set restrictions on the number of Additional Documentation Requests (ADRs) that could be sent related to these claims, as shown below. 1st ADR: can only request documentation for 1 claim 2nd ADR: can request up to 10% of total eligible1 claims 3rd ADR: up to 25% of remaining eligible claims 4th ADR: up to 50% of remaining eligible claims 5th ADR: up to 100% of remaining eligible claims Total number of claims over the $3700 Threshold that were paid March 1, 2014 through December 31, 2014). The information above is not related to the Medicare Access and CHIP Reauthorization Act of 2015.

RAC Program Improvements effective with new RACS New program improvements: Reducing provider burden; Enhancing CMS oversight and Increasing program transparency. ADR limits based on provider’s compliance with Medicare rules. If increase denials, increase ADRs. Diversity across all pt types = ADRs ADR limits for new providers RAC can only do a 6 month look back for pt status reviews from DOS when the hospital submits the claim within 3 months of DOS RAC will have 30 days to complete complex reviews and share findings. RAC must have contractor Medical Director with open access to providers to speak to MD. RAC must wait 30 days to allow for discussion request before sending the claim to the MAC for adjustment. RAC must confirm receipt of discussion request within 3 b/days.

RAC Program Improvements effective with new RACS New program improvements: Reducing provider burden; Enhancing CMS oversight and Increasing program transparency. RAC will not receive a contingency fee until after the 2nd level of appeal is exhausted. Previously RAC was paid immediately upon denial & recoupment of the claim. CMS will provide public info regarding data related to appeals. RAC must maintain an overturn rate of less than 10% at the first level of appeal, excluding claims that were denied due to no or insufficient documentation or claims corrected during the appeal process.

More Audit changes… RAC will be required to maintain an accuracy rate of at least 95%. Failure to maintain an accuracy rate of at least 95% will results in a progressive reduction in ADR Limits. Independent Auditor of the RACS: Performant/Region A 99.1% CGI/B 96.8% Connolly 92.8% (which just received the HH/DME/Hospice Region 5 contract/on hold now due to Performant’s challenge) and HDI 97.0% CMS establishes a provider relations coordinator to offer more efficient resolutions CMS will post provider compliance tips on CMS’s website. CMS will require the RACs to post more detailed review information concerning new issues to their websites. CMS will consider developing a provider satisfaction survey. https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Recovery-Audit-Program/Downloads/RAC-Program-Improvements.pdf

More Audit changes… Med Learn CR8583, Effective April 1, 2015 Providers will not be granted additional time to submit records beyond the 45 day period. Failure to respond by day 45 will result in a denial. (Note: Some MACs are requiring pre-payment in 30 days…vs post payment with the RACs.)

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