The Government Accountability Office says the CMS could potentially save tens of millions of dollars a year by standardizing how Medicare payments to hospitals and physicians are audited before the bills are paid—a recommendation likely to irk healthcare providers.
Medicare administrative contractors are already supposed to be using a form of auditing known as "prepayment review," and the more controversial recovery audit contractors were slated to begin a long-stalled prepayment review demonstration project on Aug. 27.
By using standardized methods for selecting which Medicare claims get denied for payment before the appeals process, CMS contractors may have prevented as much as $114.7 million in Medicare payments in 2010, according to the GAO study (PDF). Of that amount, GAO officials say $14.7 million appeared to be clearly improper under CMS national coverage rules, and $100 million appeared to violate the contractors' local coverage rules and may have been held back.
Jeff Baird, chairman of the healthcare group at law firm Brown & Fortunato in Amarillo, Texas, said healthcare providers were likely to take a dim view toward any recommendation of more prepayment reviews.