Friday, May 20, 2016

Claim Review Programs Could Improve

Dianne De La Mare

The US General Accounting Office (GAO) has released a report, Claim Review Programs could Be Improved With Additional Prepayment Reviews and Better Data, recommending that the Centers for Medicare & Medicaid Services (CMS): 
1) request legislation allowing the Medicare Recovery Auditors (RAs) to conduct prepayment claim reviews; and 
2) provide written guidance on calculating savings from prepayment reviews. 

The US Department of Health and Human Services (HHS) disagrees with GAO’s first recommendation; but concurs with the second recommendation. The, GAO was asked to examine the different Medicare claim review contractor activities. GAO specifically examined: 1) differences between prepayment and postpayment reviews and how contractors use them; 2) the extent to which the claim review contractors focus their reviews on different types of claims; and 3) CMS’ cost per review and amount of improper payments identified by the claim review contractors per dollar paid by CMS. GAO found that CMS uses different types of contractors to conduct prepayment and postpayment reviews of Medicare fee-for-service (FFS) claims. 

Medicare Administrative Contractors (MACs) conduct prepayment and postpayment reviews. RAs generally conduct postpayment previews. Supplemental Medical Review Contractors (SMRCs) conduct postpayment reviews as part of CMS-directed studies. Overall, there are few significant differences between conducting and responding to prepayment and postpayment reviews, according to the report. Using prepayment reviews to deny improper claims and prevent overpayments is consistent with CMS’ goal to pay claims correctly the first time and can better protect Medicare funds because not all overpayments can be collected. 

In 2013 and 2014, 98 percent of MAC claim reviews were prepayment, and 85 percent of RA claims reviews and 100 percent of SMRC reviews were postpayment. Because CMS is required by law to pay RAs contingency fees from recovered overpayments, the RAs can only conduct prepayment reviews under a demonstration. From 2012-2014, CMS conducted a demonstration where the RAs conducted prepayment reviews and were paid contingency fees based on claim denial amounts. CMS official considered the demonstration a success. 

However, CMS has not requested legislation that would allow for RA prepayment reviews by amending exiting payment requirements and thus maybe missing an opportunity to better protect Medicare funds. The various contractors focused their reviews on different types of claims and had different costs per review. The RAs focused their reviews on inpatient claims, and had an average cost per review of $158. The MACs focused their reviews on physician and durable medical equipment (DME) claims, and had an unidentifiable cost per review. The SMRCs focused on a variety of claims reviews, and had an average cost per review of $256.

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