Health Information Management

News: Recovery Auditors restart reviews; Senate weighs in on payment methodology

CDI Strategies, August 14, 2014

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Due to the continued delay in awarding new Recovery Auditor (RA) contracts, CMS made modifications to the current RA contracts allowing them to restart some reviews. Most will be done on an automated basis, but a limited number will be complex reviews of topics selected by CMS. In the meantime, CMS will continue to work on the procurement process for the four Part A/Part B regions and the national DMEPOS/HHH Region. The CMS remains hopeful that the new round of RA contracts will be awarded this year, the agency said in a release.

A shift in the way the government reimburses RAs for their work—from a percentage of recovered improper payments to a program which rewards RAs for reducing improper payments within a jurisdiction—was the recommendation from the Senate’s Special Committee on Aging in a recent report.

As a result of the "Improper Payments Elimination and Recovery Act," payment accuracy rose to 96.5% across the federal government for FY 2013, according to the report. However, improper Medicare fee-for-service payment rates increased from 8.5% in FY 2012 to 10.1% in FY 2013. The Special Committee on Aging took aim at CMS for its “duplicative and poorly coordinated” claims review processes, stating in its report that current methods places a burden upon providers and fail to adequately reduce improper payments.

Under the current system, RAs earned 9%–12.5% in contingency fees for FYs 2009 and 2010 based on the number of improper payments identified. In its report, the Special Committee on Aging said it suspected the current payment structure may have encouraged RAs to keep improper payment rates high. The Special Committee on Aging recommended that CMS consolidate its post-payment review activities and consider offering RACs financial incentives based on their ability to reduce improper payment rates in their jurisdiction.

Editor’s Note: This article originally appeared on HCPro’s HIPAA Update blog. Stay up to date on all things HIPAA by signing up for e-mail updates from this blog.

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