Revenue Cycle

Recovery Auditor improvements, transparency highlight house legislation bill

Recovery Auditor Report, November 1, 2012

Representative Sam Graves (R-MO) introduced legislation October 16 that aims to improve the performance of Medicare audit programs by implementing financial penalties for certain compliance failures. In addition, the legislation contains a number of significant potential reforms, highlighted below.

Documentation request limits

The Medicare Audit Improvement Act of 2012 (H.R. 6575) includes a combined additional documentation request limit. This legislation would establish annual limits that may not exceed 2% of all prepayment audit requests or complex postpayment audit requests in a year and 500 additional documentation requests during any 45-day period at a given facility. This section would take effect on the date the act passes and would apply to claims submitted for payment under title XVIII of the Social Security Act for items or services furnished by providers of services or suppliers on or after January 1, 2013.

Financial penalties for Recovery Auditors
One section of the bill focuses in on the improvement of Recovery Auditor operations. Specifically, the legislation would impose financial penalties—which would go to the Medicare trust funds— on the contractors that fail to meet the requirements for the following:
  • Audit deadlines. Completing a determination of each audit of a hospital the Recovery Auditor conducts within the applicable timeframe.
  • Timely communication. If a claim is denied, the Recovery Auditor must sent a demand letter to the hospital in a timely fashion.
  • Overturned appeals. Recovery Auditors must pay a fee to the prevailing party in the case of an overturned appeal. The HHS Secretary will establish a fee schedule to determine the amount of the fee.

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