Healthcare Business News

Controversial Medicare recovery audits make limited return

By Paul Demko
Posted: August 5, 2014 - 1:45 pm ET

The CMS is restarting audits of Medicare fee-for-service claims on a limited basis. The program has been dormant since June 1 when current audit contracts expired.

Lauren Aronson, director of CMS' Office of Legislation, sent an e-mail to congressional staffers Monday announcing the resumption of the recovery audit contractor program.

“Current recovery auditors will conduct a limited number of automated reviews and a small number of complex reviews on certain claims including, but not limited to: spinal fusions, outpatient therapy services, durable medical equipment, prosthetics, orthotics and supplies, and cosmetic procedures,” Aronson wrote. “The recovery auditors will not conduct any inpatient hospital patient status reviews during this limited restart period.”

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Since the audit program began in 2009, roughly $8 billion in improper Medicare payments have been identified and returned to the federal government. But hospitals have complained that the program has tied up crucial funds in endless appeals.

The American Hospital Association filed a lawsuit in federal court in May seeking to force the agency to meet its statutory requirement to decide Medicare-payment appeals within 90 days.

Currently appeals can take as long as five years. A two-year moratorium is in place preventing new appeals from being filed. The appeals backlog for Medicare payment decisions has grown tenfold since the start of the recovery audit contractor program.

The American Coalition for Healthcare Claims Integrity, which represents the audit contractors, hailed the restart of the program. “As long as there's oversight being done, that's a good thing,” said Becky Reeves, a spokeswoman for the group. “There's still a pretty large gaping hole in what these contracts are able to review.”

Follow Paul Demko on Twitter: @MHpdemko

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