CMS Medicaid Recovery Audit Contract (RAC)
The Centers for Medicare & Medicaid Services (CMS) has revamped their interactive webpage that serves as a public information source on the status of state Medicaid Recovery Audit Contractor (RAC) programs. Medicaid RACs are contractors, working for states, that will audit payments made to health care providers to identify Medicaid payments that may have been underpaid or overpaid and recover overpayments, similar to the RAC program in Medicare.
The new webpage provides information about each state’s RAC program. Initially, the webpage’s contents will reflect state activity in establishing RAC programs and offer descriptions of their programs as provided in their Medicaid State Plan amendments. In the future, CMS expects the page to expand and reflect performance data for each state’s RAC program, such as the type of Medicaid claims that were reviewed, and the amount of overpayments that were recovered. This information will allow states to monitor the performance of their RAC program and allow the public and other stakeholders to be informed of the results.
Medicare FFS RAC Regions
View which RAC could be reviewing your claims for Medicare Fee for Service Payments.
September 13, 2012: CMS is revamping the RAC website to promote transparency and incorporate feedback from States as well as industry. The enhanced website includes State-reported information on each State’s RAC program, the name of each RAC vendor and Medical Director, contact information for the State Program Integrity Director, and user-friendly charts and data. Visit the new website.
February 24, 2012: Connolly Consulting, the Medicare Fee for Service Recovery Audit Contractor (RAC) for Region C has posted a notice on its website announcing its intent to conduct automated review of claims for improper payments to physicians for transforaminal epidural injections (CPT codes 64479 – 64484). The RAC contractor will compare the reported ICD-9-CM diagnosis code(s) to the lists of covered conditions found in the coverage policies of the Medicare Administrative Contractors (MAC) for the states within its jurisdiction. We remind our members to make certain that they stay up-to-date on the coverage policies for their Medicare contractors via the MAC’s website and/or the Medicare Coverage Database found on the Centers for Medicare and Medicaid Services website.
For a complete listing of the CMS approved issues for Region C, please click here.
February 7, 2012: CMS announced that the four Medicare Fee for Service Recovery Audit Contractors (RACs) collected $397.8M in overpayments from October 2011 – December 2011. Total corrections (both overpayments collected and underpayments returned to providers) total $1.45 billion since October, 2009. More information.
December 6, 2011: As of January 3, 2012, CMS is transferring the responsibility for issuing demand letters to providers from its Recovery Auditors (RACs) to the claim processing contractors. See Change Request (CR) 7436 for complete details.
November 18, 2011: CMS Announces FY2011 Error Rates and New Demonstrations to Target Improper Payments
The Centers for Medicare & Medicaid Services (CMS) released the FY 2011 Medicare and Medicaid payment error rates and announced three new demonstrations that are intended to help curb improper payments. The Medicare fee for service program improper payment rate was 8.6 percent and the Medicaid rate is 8.1 percent.
The most notable demonstration project involves the Recovery Audit Contractors (RAC). The Recovery Audit Prepayment Review demonstration will allow RACs to review claims before they are paid to ensure that the provider complied with all Medicare payment rules. The RACs will conduct prepayment reviews on certain types of claims that historically result in high rates of improper payments. These prepayment reviews are a significant shift from the traditional “pay and chase” methods of looking for improper payments after they have been made.
October 2011: Medicare auditors find $593 million in incorrect payments
FY 2010 was the first year in which the Recovery Auditors began actively identifying and correcting improper payments under the National Recovery Audit program. All the Recovery Auditors began reviewing claims in October 2009. In the past fiscal year, the Recovery Auditors identified and corrected $92.3 million in combined overpayments and underpayments. Eighty-two percent of all Recovery Audit program corrections were collected overpayments and 18 percent were identified underpayments that were refunded to providers.
August 2, 2011: Effective January 3, 2012, any demand letters resulting from a RAC overpayment determination will be issued from your Medicare Contractor rather than from the RAC. More information.
July 2011 - CMS has released updated results through June 2011
The RACs collections continue to increase. They collected $233.4M in improper payments from March to June 2011. While hospitals are still the main focus, anesthesiologists and other physicians need to continue all efforts to insure that the claims they submit will stand up to post-payment scrutiny. More information.
CMS has posted the cumulative results of the RACs’ work since the beginning of the demonstration projects from March 2005 through to March 2011.
Per the document available here, collections from January to March 2011 collections are significantly greater than those from October to December 2010 and from October 2009 to September 2010.
Also of note: Vent management is a top issue for those in Region A (CT, DE, DC, ME, MD, MA, NH, NJ, NY, PA, RI and VT)
DCS - the RAC for Region A - has posted the following notice on its website:
- Anesthesia care and packaged evaluation management services. Identification of overpayments associated with evaluation and management services billed the day prior to or day of anesthesia services by an anesthesiologist. 1) E/M services (as specifically defined in the IOM) billed the day prior to or day of anesthesia services without modifiers 24, 25, or 57. 2) E/M services billed the same day as 01996 without modifiers 24, 25 or 57.
We remind our members that if an anesthesiologist performs an evaluation and management (E/M) on the day prior to an anesthesia service, and that E/M is NOT the work covered by the pre-anesthesia examination/evaluation included in the base unit valuation, please note that in order to avoid automatic review by a Recovery Audit Contractor, s/he must append the appropriate modifier (typically either 24, 25 or 57) to that service. While automatic RAC review does not include review of the record, your documentation should be quite clear how it is NOT the pre-anesthesia exam/eval to support any indicated appeal. This is not a circumstance that happens very frequently since the base unit values include the pre-anesthesia exam/eval. An example of when such a service might be reportable is when there is a request from the surgeon for the anesthesiologist to make recommendations on preparing or optimizing the patient in advance of a possible surgical procedure. This would have to be something completely separate and above/beyond the work covered by the base units assigned to the anesthesia service.
RAC News Archive:
April 10, 2010 - ASA convinces Region D Recovery Audit Contractor to discontinue its Anesthesia Care Package E&M Services Automated Review
After a somewhat controversial demonstration program in a handful of states, the Medicare program established a nationwide Recovery Audit Contractor network on January 1 to identify and correct inaccurate payments from the government to all types of Medicare providers. The ASA has been monitoring the RACs closely to assure that they are following federal guidelines and treating our members fairly. This effort has already paid off, as we successfully resolved an anesthesia recoupment effort with one of the RACs just this week. Here are the details.
In early January 2010, Health Data Insights (HDI), the Recovery Audit Contractor for Region D (Alaska, Arizona, California, Hawaii, Iowa, Idaho, Kansas, Missouri, Montana, North Dakota, Nebraska, Nevada, Oregon, South Dakota, Utah, Washington and Wyoming), posted notice on its website that it intended to review claims where an anesthesia code and an Evaluation and Management (E&M) code were reported by the same provider within a specific date range. The website posting was as follows:
Anesthesia Care Package E&M Services. Under NCCI edit rules, the anesthesia care package consists of preoperative evaluation, standard preparation and monitoring services, administration of anesthesia, and post-anesthesia recovery care. Anesthesia CPT codes 00100 to 01999 (except 01996) include Evaluation & Management (E&M) services rendered on the day before anesthesia (pre-operative day), the day of the anesthesia and all post-operative days. CPT code 01996 includes E&M services on the same day as the 01996 service only. Physicians can indicate that E&M services rendered during the anesthesia period are unrelated to the anesthesia procedure by submitting modifiers 24, 25, 57 and/or 59, depending on claim specific circumstances, on the E&M service. Only critical care E&M services are payable during the anesthesia post-operative period. The post-operative period is defined as the day immediately following the anesthesia service and any subsequent days during the same inpatient hospital admission as for the anesthesia service.
The cited sources were the National Correct Coding Initiative (NCCI) manual and Chapter 12, Section 50 of the Centers for Medicare and Medicaid Services (CMS) Claims Processing Manual. The approval date listed was November 11, 2009, and the review applied to claims paid on or after October 1, 2007. HDI stated that it would use an automated review process.
We believe that HDI intended to look for instances where providers were inappropriately separately reporting the typical pre‐ or post-anesthesia work covered by the base unit value assigned to an anesthesia code. HDI’s use of automated review (where the RAC can simply recoup payments based on a review that shows an anesthesia code and an E&M code were reported within a specified date range) cannot recognize those circumstances where the E&M represents an appropriately reported service such as a visit for post‐op pain follow up. That can only be accomplished through complex review where the RAC must request and review records.
ASA contacted HDI in January to raise our concerns about this RAC issue. We disagreed with HDI’s interpretation of how the NCCI edits pairing anesthesia and E&M should be applied. NCCI edits are applicable when services are performed by the same provider on the same patient on the same date of service. This would not preclude reporting of an E&M on the day before or after an anesthesia service as long as the E&M was not for the pre‐ or post‐anesthesia care that is part of the base unit value assigned to the anesthesia code. If that criterion is met, there is no need for a modifier as HDI stated. Furthermore, the global concept does not apply to anesthesia codes so reviews cannot be based on that concept. It may be appropriate for an anesthesiologist to report an E&M that is not the typical pre‐anesthesia exam/evaluation on a day before the surgical procedure. An example is a request from the surgeon for the anesthesiologist to make recommendations on preparing/optimizing the patient in advance of a possible surgical procedure. This is not something that happens frequently, but it does happen. ASA requested the source for the statement, “The post‐operative period is defined as the day immediately following the anesthesia service and any subsequent days during the same inpatient hospital admission as for the anesthesia service.” This statement is not accurate and should not be used as the basis of a RAC review.
When an anesthesiologist rounds on a patient to follow up on a post‐op pain procedure (this is not the usual post‐anesthesia follow up), s/he will use an E&M code that corresponds to the location and level of the service. A frequent example of this reporting pattern is when the patient undergoes a total knee replacement under general anesthesia. If the anesthesiologist places a continuous femoral block to provide post‐op pain control (in this circumstance, placement of the block is separately reportable from the anesthesia service per CMS), any medically necessary follow up for the block on a subsequent day is reported with an E&M code since this block has a zero day global period.
ASA also expressed concerns that HDI prepared demand letters dated January 14, 2010, but such letters were not postmarked until February 9, 2010. Since a provider has 30 days from the date of the demand letter in which to file an appeal request andavoid recoupment during the appeal process, this delay deprived our members of many of their rights. Many of our members have reported having payments recouped since they did not receive timely notification. Representatives from ASA and HDI met via conference call on March 3, 2010. After hearing our concerns, HDI representatives stated that:
HDI will research proper use of modifiers per the information we provided.
- No new files will be sent for review while they look into this matter, but any letters in process will be sent to providers.
- In the event that HDI sees that this target is flawed and needs to be restructured so as to meet its stated goal of uncovering anesthesia unbundling without impacting providers who are legitimately reporting E&M codes, providers will receive re‐payment of the recouped funds.
- HDI informed ASA that the delay in sending the letters was due to incomplete information they received from contractors. Specifically, a file they received did not contain complete provider contact information; in another instance, the contractor did not send HDI all the needed files.
- HDI expected to have resolution for ASA within a week, but did note that they will require approval from CMS.
ASA followed up with HDI over the next several weeks. We also raised the matter at a meeting of the Practicing Physicians Advisory Council. PPAC is charged with advising HHS and CMS on proposed changes in regulatory matters and instructions CMS issues to its contractors through its carrier manuals. Finally, ASA has had several discussions with CMS staff on this issue.
In early April, without any comment, HDI removed the issue from its website. ASA continued its push for full resolution. We urged HDI to promptly refund the money that they recouped from our members. There were two important factors at hand: process and timing. Physicians and other providers should not have to use a time consuming and labor intensive appeal process to get back money that should not have been taken from them in the first place. The other issue was time. The appeal clock started ticking on January 14 – the date of the letters – even though HDI did not mail the letters until February 9. Appeals must be filed within 120 days of the date of the letter. HDI stated in our March 3 call that if their review process was flawed, the recouped money would be automatically returned.
During our April 7 contact with HDI, an HDI staffer informed ASA that we should expect to receive a response to our concerns on Tuesday, April 13.
We are pleased to report that we have received that notice. As a result of ASA’s discussions with HDI about our concerns over this issue, HDI will enact the following revisions to its review:
- Automated review will continue to identify improper payments for E&M Services rendered the day of Anesthesia Services (CPT codes 00100 to 01999).
- Findings will include services rendered by the same individual Practitioner as well as services rendered by another member of the same group practice (based on Tax ID#) and of the same provider specialty.
- Automated review for E&M services not rendered on the day of Anesthesia Services (i.e., pre-op and post-op days) were discontinued on March 6, 2010. Consideration of Complex Review audits for pre- and postoperative day anesthesia services will be considered based on additional analysis of the Region D CMS Claims Data and workload priorities.
- Accordingly, the pre- and postoperative day E&M lines submitted by HDI to Claims Processing Contractors (CPC) for adjustment under this New Issue are being reversed. Any adjustments made by the CPC for services other than those pre-op and post-op day E&M services should be addressed with the CPC.
ASA wants our members to take note that HDI may propose this issue for Complex Review where the RAC must request and review records. We remind our members that the base unit value assigned to each anesthesia code includes the typical pre- and post-anesthesia evaluations. That work should not be separately reported either on the day of the anesthesia service or on a preceding or subsequent date. We also remind our members that documentation of an E&M service should clearly support the level of service and establish the reason for the encounter.
We appreciate HDI’s and CMS’s willingness to hear our views and the actions they have taken on this matter.