Q. Has recent legislation led to additional scrutiny for payments made to health-care providers from federally funded programs? 

A. 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 those payments.

Q. How can I identify the value of improper Medicare and Medicaid fee-for-service payments?

A. 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?

A. The Comprehensive Error Rate Testing program reviews claims and medical records to determine compliance with Medicare coverage, coding and billing rules. Testing issues include:

  • No documentation; 
  • Insufficient documentation; 
  • Medical necessity; 
  • Incorrect coding; 
  • Other (duplicate payments/no benefit category/other billing errors). 

Q. What is the process for responding to a CERT record request?

A. 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?

A. 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 websites.

Q. How do I find out who my RAC is?

A. 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?

A. 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?

A. 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?

A. 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?

A. 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?

A. 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 ( cms.gov).

Q. Is there a way to mitigate potential overpayments in my office?

A. 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?

A. 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.

Ms. McCune is vice president of the Corcoran Consulting Group. Contact her at  DMcCune@corcoranccg.com.