In an update to its therapy webpage, the Centers for Medicare & Medicaid Services (CMS) released late Wednesday afternoon a long-awaited “frequently asked questions” document addressing the concerns of the therapy stakeholder community over the Recovery Auditor (RAC) review of therapy subject to manual medical review. In response, for clarification on potential multiple (and repetitive) submissions for multiple dates of service for claims billed on the CMS 1500 form, CMS indicated: “The MACs and Recovery Auditors will review based on how the claim was submitted. Each claim will be reviewed individually and the additional documentation request will be claim by claim.”

Providers, such as hospitals, rehab agencies, CORFs, and SNFs that bill on the UB04, will not experience this paperwork submission burden as they typically submit claims monthly, so multiple dates of service would be contained on one claim, resulting in only a single ADR request. Private practice therapists, most of whom bill several times a week or even daily, will experience undue paperwork burdens, perhaps unintentional, but nonetheless real, and need to ensure rapid deployment of a “RAC response team.”

The development of the FAQ is in response to the questions posed by the various members of the therapy stakeholder group, including the American Physical Therapy Association and the National Association of Rehabilitation Providers and Agencies, among others, a number of weeks ago prior their meeting with CMS on how the manual medical review would be implemented. CMS had originally indicated that the Medicare Administrative Contractors (MACs) would continue to conduct manual medical reviews, as they had done in the fourth quarter of 2012 when the program was phased in over three months. But CMS had also indicated they were looking for a permanent solution to the manual medical review of therapy that called for prepayment review of claims at the $3,700 threshold, particularly since the legislation called for prepayment review within a 10-day time frame.

CMS settled on a solution that entrusted the program to one of its review partners: the Recovery Auditors, formerly known as the Recovery Audit Contractors, and “affectionately” known as RACs. Effective April 1, 2013, the RACs took over the administration of the therapy manual medical review program, with prepayment review to be conducted in those states that are already part of the RAC Prepayment Demonstration, and post-payment review to take place in all other states. RACMonitor provided breaking news on the CMS announcement in a March 22 special edition.

A few items of note for therapy providers:

  1. Each claim will be reviewed individually and the additional documentation request will be claim by claim.
  2. There will be no reimbursement for medical record costs, as in most RAC complex medical reviews.
  3. The RACs will be paid on a contingency fee, per the RAC program.
  4. Medical records can be submitted via fax, mail, CD/DVD, or esMD.
  5. RACs will use existing rules of manual medical review.
  6. Current RAC ADR limits will NOT apply, meaning 100 percent review.
  7. RAC discussion period is only available for post-payment review.

A question of concern is providers who have clinics in multiple jurisdictions. According to the CMS FAQ on this topic, “Providers located in a prepayment demonstration state that are serviced by the primary MAC in that state will have prepayment review conducted. Providers located in a prepayment demonstration state that are serviced by another MAC will have post-payment review conducted. The provider location and the MAC will determine the type of review.” While this addresses chain facilities (such as hospital systems), it does not appear to provide much instruction for outpatient therapy providers who have clinics in multiple states and currently submit claims to the associated MAC for each state.

The first RAC to post manual medical review of therapy claims was Connolly, the Region C RAC, and was first reported by RACMonitor in an April 10 special edition article.

About the Author

Nancy J. Beckley, MS, MBA, CHC, is president of Nancy Beckley & Associates LLC. She is certified in healthcare compliance and has extensive experience specializing in rehabilitation and compliance. Nancy is the senior correspondent for Monitor Monday, having been associated with it since its inaugural broadcast on January 18, 2010.

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