FPs in 11 States Could Get Snagged in Medicare RAC Demonstration Project

August 23, 2012 05:10 pm News Staff

Heads up to family physicians who practice in Florida, California, Michigan, Texas, New York, Louisiana, Illinois, Pennsylvania, Ohio, North Carolina and Missouri: A new antifraud demonstration project is coming your way, courtesy of CMS.

On Aug. 27, CMS will commence its Medicare Recovery Audit Contractor (RAC) demonstration project, which is aimed at stopping improper Medicare fee-for-service payments before they are made to hospitals and health care professionals.

In an effort to improve on its traditional "pay and chase" recovery method, CMS has directed RACs to conduct prospective reviews on claims that Medicare says too often result in high rates of wrongful payment.

Although initial reviews will target hospitals in the 11 states and focus on short inpatient hospital stays for diagnoses such syncope and collapse, transient ischemia, and hemorrhage, Debra Seyfried, M.B.A., C.P.C., an AAFP coding and compliance specialist, said family physicians could find themselves on the receiving end of a RAC query.

"Although the first stage of the project targets hospitals, queries for any missing information will be made to the admitting physician, and that very likely could be a family physician," said Seyfried.

Accordingly, in the event of a hospital audit, these physicians could face a delay in payment for services rendered. Hospitals have 30 days to respond to a request for documentation, and auditors have an additional 45 days to make their determination as to the validity of the claim.

"There is the potential for a 75-day delay in payment to the physician," said Seyfried, who also noted that a hospital review could open up a separate review of the physician's claim. CMS has not yet clarified, however, whether the admitting physician's claim automatically will be held until the RAC has completed its review of the hospital claim, she added.

More details about the demonstration project are available in CMS' provider outreach materials(www.cms.gov). Those details include, for example,

  • audits conducted as part of this demonstration project will not replace Medicare administrative contractor prepayment review, but contractors will coordinate review areas to avoid duplicative efforts;
  • health care professionals audited as part of this demonstration have the same appeal rights as in any other Medicare payment denial;
  • audited claims will be exempt from future postpayment reviews by a CMS contractor; and
  • audit contractors will notify health care professionals of detailed audit results via a hard-copy letter.

The three-year demonstration project will end on Aug. 26, 2015, but could be rolled out nationwide if CMS deems it a success. Questions regarding the project can be e-mailed to CMS.