Revenue Cycle

CMS posts Q4 improper payment figures, top issues by region

Recovery Auditor Report, January 26, 2012

Each quarter CMS issues a recovery audit program update that details the total amount of overpayments and underpayments indentified in that quarter. In addition, CMS posts the top recovery auditor issue for each region.

The most recent update, which provides information on the time period July 1, 2011 to September 30, 2011, identifies $277.1 million in overpayments and $76.6 million in underpayments, for a total of $353.7 million in improper payments. These numbers are up from the previous quarter, for which CMS reported $233.4 million in overpayments and $55.9 million in underpayments for a total correction amount of $289.3 million.

For each quarter CMS has issued these reports, the total correction amount numbers have raised dramatically:

  • October 2009 – September 2010: $92.3 million
  • October 2010 - December 2010: $94.3 million
  • January 2011 - March 2011: $208.9 million
  • March 2011- June 2011: $289.3 million
  • July 2011 – September 2011: $353.7 million

Perhaps most telling of all the figures, however, is the quarterly difference in the correction amount of the total national program since its inception. The Q3 update lists the total correction amount of the national program at $684.8 million, while the latest report has the amount at $939.4 million. This jump is indicative of the individual recovery auditors ramping up their efforts to identify improper payments nationwide—specifically targeting medical necessity issues, as indicated by the Q4 report:

  • Region A: Renal and urinary tract disorders (Medical necessity)
  • Region B: Surgical cardiovascular procedures (Medical necessity)
  • Region C: Acute inpatient admission neurological disorders (Medical necessity)
  • Region D: Minor surgery and other treatments billed as inpatient (Medical necessity)

For Region A and D, the top identified issues didn’t change from the Q3 report, but the fact that Region B and C now both identify a medical necessity issue as their top issue truly signifies that the recovery auditors have increased their efforts and focus on issues that may have not been medically necessary for the setting in which they were billed.

To view the Q4 report, click here: http://www.cms.gov/Recovery-Audit-Program/Downloads/FY2011QtrlyReport.pdf

To view the Q3 report, click here: http://www.cms.gov/Recovery-Audit-Program/Downloads/NatProg.pdf

To stay on top of the latest RAC-approved issues in your state, visit the Revenue Cycle Institute website.

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