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CMS Posts FAQ on Manual Medical Review by Recovery Auditors (RACs)

April 18, 2013 2 Comments
 CMS FAQ on Manual Medical Review of Therapy ClaimsRAC ‘n Rehab© Series CMS, without much fanfare, released a long anticipated Frequently Asked Questions document regarding manual medical review of therapy claims over the $3700 thresholds.  The FAQ is in reponse to the questions posed by the therapy stakeholder group a number of weeks ago prior their meeting with CMS on how the manual medical review would be implemented.  Manual medical review of therapy claims over the $3700 thresholds ($3700 for PT and SLP combined and $3700 for OT) was mandated in the American Taxpayer Relief Act of 2012, and effective for claims beginning January 1, 2013.  CMS had originally indicated that the Medicare Administrative Contractors would continue to conduct manual medical reviw, as they had done in the 4th quarter of 2012 when the program was phased in over 3 months.  But CMS had also indicated they were looking for a permanent solution for a program that called for prepayment review of claims at the $3700 threshold, particularly since the legislation called for prepayment review within a 10 day timeframe.

CMS settled on a solution that involved entrusting the program to one of its review partners:  the Recovery Auditors, formerly known as the Recovery Audit Contractors, and “affectionately” known as RACs.  Effective 4-1-2013 the RACs took over the administration of the therapy manual medical review program with prepayment review to be conducted in those states that are already part of the RAC Prepayment Demonstration, and postpayment review to take place in all other states.

A few items of note for therapy providers:

  • There will be no reimbursement for medical record costs, as in most RAC complex medical reviews
  • The RACs will be paid on a contingency fee per the RAC program
  • Medical records can be submitted via fax, mail, CD/DVD, or esMD
  • RACs will use existing rules of manual medical review
  • Current RAC ADR limits will NOT apply, meaning 100% review
  • RAC discussion period is only available for postpayment review

The first RAC to post manual medical review of therapy claims was Connolly, the Region C RAC.

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Nancy Beckley

Nancy J. Beckley MS, MBA, CHC: President-Nancy Beckley & Associates LLC. Compliance outsourcing, risk assessment, compliance plans, compliance training, auditing, due diligence, investigation support for therapy providers.

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Comments (2)

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  1. anamarie says:

    #8 in the FAQ’s states that the RAC is only authorized to review claims OVER the $3700 and not anything between $1900- $3699…do we still have to submit the entire patient chart notes beginning from the eval?

  2. Nancy says:

    Thanks for your comment. The ADRs that I have reviewed (from RAC Region B) have requested essentially most of the therapy record. Per CMS they are reviewing the dates of service overt $3700. In order to review date of service over $3700 it is likely they need the certified plan of care as well as progress reports. There is much uncertainly as to what the RA will do if they find a problem with the POC or a progress report or required recertification. Will they only deny the therapy over $3700? Stay tuned for further information, and please let me know if you get a RAC ADR request, and what items are being asked for in the ADR.

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