Medicare Audit Program Change Kicks in Jan. 3, 2012

Family physicians could be the beneficiaries of a change in CMS' Recovery Audit Program that will shift the collection responsibility from recovery auditors, formerly called recovery audit contractors, or RACs, to Medicare administrative contractors.

According to a recent posting in CMS' online publication MLN Matters, (2-page PDF; About PDFs) as of Jan. 3, 2012, Medicare recovery auditors no longer will have responsibility for issuing demand letters.

According to Cynthia Hughes, C.P.C., an AAFP coding and compliance specialist, CMS is striving for a more efficient process. "There have been many complaints that the recovery auditor letters demanding refunds are mailed long after the date of the letter," said Hughes. "This cuts into the physician's response time."

Instead, the new process dictates that recovery auditors continue to investigate overpayments made to physicians, providers and suppliers who bill Medicare claims. However, when a recovery auditor finds an improper payment, the auditor will submit a claim adjustment to the physician's Medicare administrative contractor.

The Medicare administrative contractor then is responsible for determining the amount due and issuing an automated demand letter notifying the physician of any overpayment identified by the recovery auditor.

"Hopefully, this new process will allow time for practices to investigate whether or not the claim was billed and paid in error," said Hughes. "Physicians will also have adequate time to utilize CMS' rebuttal process if they think the recovery auditor is wrong."

The Medicare contractor will follow the usual process to recover any overpayment made to a physician and is responsible for responding to administrative concerns, such as payment recovery timelines and the appeals process.

Physicians should not hesitate to contact the initiating recovery auditor about any specific audit questions; the auditor's contact information will be included in the demand letter.

Additional information about the changes is available in in CMS' change request 7436 (6-page PDF; About PDFs).