Reflecting on a demonstration that identified $1.03 billion in improper payments of which $37.8 million were underpayments, CMS is making changes to the permanent program before it rolls out nationally in the first quarter of 2009.


Among the changes is the number of files that a RAC contractor can ask of a provider organization.   Others changes include:


Inpatient Setting

Among inpatient hospitals, inpatient rehabilitation facilities, skilled nursing facilities and hospices, RACs will be limited to requesting 10 percent of the average monthly Medicare claims, up to a maximum of 200 per 45 days.


Other Part A Billers

Here, among outpatient facilities and home health, the limit placed by CMS on RACs is 1 percent of average monthly Medicare services, with a maximum of 200 claims per 45 days.



Within large groups, described by CMS as having more than 16 individuals, the maximum number of medical records is 50 per 45 days. For groups of six to 15, the number is 30 per 45 days. For solo practitioners, the number is 10 per 45 days. Finally, physician partnerships, from two to five individuals, the number of medical records is 20 medical records per 45 days.


Other improvements in the permanent program will be making transparency a high priority. CMS says the program will more transparent by listing the types of issues undergoing review on each of the RACs’ Web sites.


CMS will require RACs to have a medical director, coding experts on board, and credentials of reviewers must be presented on request.


If an audit results in denial of a claim, according to CMS Acting Administrator Kerry Weems, the medical director must be available to discuss the denial if requested to do so. If the denial is overturned at any level of appeal, the RAC must pay back the contingency fee.


So how did providers respond to the demonstration? The majority of providers gave the RAC demonstration program good marks. According to CMS Acting Administrator Kerry Weems, a Gallup survey conducted between May and July 2007, 74 percent of respondents said the RAC efforts to recoup overpayments were fair and reasonable.  Seventy-one percent thought that RACs applied Medicare policies correctly, according to Weems.


When the permanent program moves forward, CMS said it would


monitor the efforts of the RACs to ensure they are providing sufficient information and undertaking outreach activities to reach all the health care providers in their regions so no provider feels unreasonably burdened.



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