Kusserow on Compliance: Recovery Audit Program Update

On virtually the last day of 2014, CMS announced new recovery audit contracts and changes to the Recovery Audit Program. It awarded the Region 5 Recovery Audit contract to Connolly, LLC, for identification and correction of improper payments related to durable medical equipment, prosthetics, orthotics and supplies (DMEPOS); and home health and hospice claims submitted to CMS (national contract). However, CMS has suspended work under the contract due to a post-award protest filed with the Government Accountability Office (GAO). New Recovery Auditor contracts for Regions 1, 2, and 4 remain under “a pre-award protest,” which is expected to continue into the summer. Additionally, the procurement process will continue for Region 3.

The changes to the Recovery Audit Program include improvements to reduce provider burden and increase transparency in the program. The changes will be effective with each new contract award and include, but are not limited to:

  1. The look-back period for patient status reviews is restricted to six months after the date of service, if the hospital has submitted its claim within three months of the date of service;
  2. Additional documentation requests (ADR) limits will correspond with providers’ compliance with Medicare rules; providers with lower denial rates will have lower ADR limits and providers with higher denial rates will have higher ADR limits;
  3. ADR limits will be diversified across all claim types of a facility (i.e., inpatient, outpatient) to ensure that a provider with multiple claim types is not disproportionately affected by a recovery audit review in one claim type;
  4. Recovery Auditors will not receive a contingency fee until after the second level of appeal is exhausted;
  5. Recovery Auditors must wait 30 days to allow for a discussion request before sending the claim to the Medicare Administrative Contractor for adjustment; and
  6. Recovery Auditors will be required to maintain an overturn rate of less than 10 percent at the first level of appeal, or be subject to a corrective action plan.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2015 Strategic Management Services, LLC. Published with permission.