Q. Has recent legislation led to additional scrutiny for payments made to health-care providers from federally funded programs?
Yes. Although not specific to health care, the Improper Payment
Elimination and Recovery Act, signed by President Obama in July 2010,
expands the requirements for identifying programs and activities
susceptible to improper payments with a goal of reducing and recovering
Q. How can I identify the value of improper Medicare and Medicaid fee-for-service payments?
Every year, the Centers for Medicare & Medicaid Services audits a
sample of fee-for-service claims to determine if they were paid
appropriately. The results are extrapolated to the universe of claims
paid for the year. The Medicare and Medicaid improper payment rates are
issued annually as part of the Department of Health and Human Services’
Agency Financial Report.
Some federal agencies publish advanced warning for services likely to be
scrutinized. For example, the annual publication of the Office of
Inspector General Work Plan, published each fall, identifies a series of
items applicable to ophthalmology. Returning issues include place of
service errors; E/M services; E/M services during global surgery
periods; compliance with assignment rules; modifiers GA/ GZ/GY and
appropriate use; and durable medical equipment claims submitted with
modifiers. New issues for scrutiny include error-prone providers and
payments for drugs, particularly Avastin and Lucentis.
Q. What is a ‘CERT’ audit and what does it entail?
The Comprehensive Error Rate Testing program reviews claims and
medical records to determine compliance with Medicare coverage, coding
and billing rules. Testing issues include:
Q. What is the process for responding to a CERT record request?
- No documentation;
- Insufficient documentation;
- Medical necessity;
- Incorrect coding;
- Other (duplicate payments/no benefit category/other billing errors).
You must respond by submitting copies of the information requested.
This may require securing supporting documentation from another source
(e.g., hospital, ASC). Keep a copy of exactly what was sent and pay
attention to the specified due date. Because one focus of the CERT
program audit validates the identity of the provider, ensure that the
documentation contains a valid signature that is legible, or submit a
signature log identifying the provider’s signature and typewritten name.
Q. What is the Recovery Audit Contractor program?
The CMS awarded contracts to four independent agencies, known as
RACs, to execute a program identifying improper payments, waste, fraud
and abuse within the Medicare and Medicaid programs. Any new issues and
areas of concern are posted on the CMS website and the individual RAC
Q. How do I find out who my RAC is?
States are divided into four regions.
The four contractors are:
Q. Are there limits to how many medical records may be requested by the RAC?
Limits exist for record review requests based on the size of the
physician practice. In a 45-day period, they may request no more than:
- 10 records for solo providers or groups of up to five providers;
- 25 records for a group of six to 24 providers;
- 40 records for a group of 25 to 49 providers; and
- 50 records for a large group (50 or more providers).
Not all four contractors publish the same issues but there are many
issues on their websites pertinent to your practice. They include
place-of- service coding for physician services in an outpatient setting;
new patient visits; global surgery (use of modifiers-24 and -25 on
office visits); and National Correct Coding Initiative edits.
The look-back period will be three years from the claim payment date.
No claims paid prior to October 1, 2007 are eligible for review.
Q. How do we respond to a RAC demand letter?
Most of the issues under review are published as “automated,”
implying an erroneous claim and an expectation of a refund. The letter
provides a deadline date (approximately 45 days from the date of demand
letter) for you to submit a refund.
If needed, there is a RAC appeals process. Also, although not a formal
part of the appeals process, there is a discussion period that allows
you to contact the RAC reviewer with additional information. You may
also begin the formal appeals process of redetermination,
reconsideration and administrative law judge hearing.
Q. Will the RACs recoup my overpayment from my future Medicare checks?
Maybe. You may request an offset by faxing a request within 20 days
of the demand letter if you have no intention of appealing and do not
want to issue a check. If an appeal is not filed within 30 days of the
demand, recoupment of the demand amount plus interest applied as of day
31 occurs at day 40.
It should be noted that the RAC program is expanding beyond Medicare
claims. The Patient Protection and Affordable Care Act (PPACA) section
6411 expands the program to also include Medicaid, Medicare Part C and
Medicare Part D. The exact implementation date for the expansion is
unknown at this time.
Q. Have there been any changes to the Medicare claims appeals process?
Not recently. A series of changes occurred in January 2006 As
required by the Medicare Modernization Act of 2003 §521. They included
revised time frames for appeals; introduction of qualified independent
contractors; movement of the Administrative Law Judge function from the
Social Security Administration to the HHS; revised time requirements for
issuance of appeals decision notices; and a process for correcting
minor issues without an appeal.
Q. Where can I learn more about the various levels of appeal?
In January 2011, the HHS and CMS published a brochure called The
Medicare Appeals Process as part of their Medicare Learning Network on
this topic.It is available on the CMS website (
Q. Is there a way to mitigate potential overpayments in my office?
Yes. Compliance programs require you to regularly audit and monitor
your claims. By doing so, you find and correct issues promptly. Training
physicians and staff follows, thus reducing any potential errors.
Q. Are any of these compliance programs mandatory?
No, but the PPACA section 6401 indicates that they will be mandatory
for participation in federally funded programs. No deadline has been
announced for required participation.