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CMS to Restart Some RAC Reviews

August 4, 2014 3 Comments

CMS announced today that it is initiating contract modification with the current Recovery Auditors in Regions A, B, C and D to restart reviews of a limited number of issues.  Finish/Start While CMS had previously announced that new Recovery Auditor (RAC) contracts would be announced for Regions 1-5 no later than August 15th their announcement today seemed to suggest that August 15th may come an go with respect to the new RAC contract awards.  According to the CMS announcement:

Due to the continued delay in awarding new Recovery Auditor contracts, the CMS is initiating contract modifications to the current Recovery Auditor contracts to allow the Recovery Auditors to restart some reviews. Most reviews will be done on an automated basis, but a limited number will be complex reviews of topics selected by CMS.  Work continues on the procurement process for the four Part A / Part B Regions and the national DMEPOS/HH&H Region. The CMS remains hopeful that the new round of Recovery Auditor contracts will be awarded this year.

It is not quite clear if CMS is in a race to the start or to the finish on Recovery Audit activity.

CMS  to Restart Some RAC Reviews – Therapy Implications

The CMS announcement on the resumption of limited reviews did not specify what reviews would continue, however the American Coalition for Healthcare Claims Integrity reported in their press release:

Under the new contract arrangement, RACs will conduct automated and complex reviews on claims related to spinal fusions, outpatient therapy services, durable medical equipment, prosthetics, orthotics and supplies, and cosmetic procedures.

Outpatient therapy reviews likely refer to manual medical review of therapy over the $3700 thresholds, which are reviews mandated by Congress, but assigned by CMS to the RACs for review.  Therapy providers should be prepared to receive an onslaught of ADR requests commensurate with patient activity over the $3700 thresholds.  Based upon the problems with manual medical review of therapy claims reported by providers, all outpatient therapy providers should quickly get acquainted with the newly appointed CMS Provider Relations Coordinator in order to secure support and assistance for paperwork and communication, starting with the specific ADR letter for outpatient therapy manual medical review.

Do you have therapy claims over the $3700 threshold in 2014?  Are you prepared to submit the claims when you receive the ADR?  Do you know how to prepare an ADR to increase your chance of success?

 Photo: Anne via Compfight


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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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  1. CMS to Restart Some RAC Reviews | healthBACON | November 7, 2014
  1. anamarie says:

    If you get a RAC audit for going over the $3700 threshold, are the auditors limited to auditing only dates of service over the threshold OR can they audit the entire chart?

  2. Hi Anamarie. Thanks for your question. A RAC audit of therapy (manual medical review) over the $3700 threshold is not an audit of the entire chart – however CMS has made it clear that all dates of service on the claim containing the service(s) that triggered the $3700 threshold. Additionally when the ADR request is received, you will notice that they will request the evaluation, plan of care and progress reports. So essentially a good deal of the chart will be reviewed – keeping in mind that the $3700 review is a medical necessity review – and one purpose of a plan of care is to demonstrate medical necessity and a purpose of the progress report is to show continued medical necessity.

    With the RAC $3700 resumed (to review all therapy over $3700) covering March 1 – December 31, 2015, we are likely in for a few bumps in the road given the past experiences of providers with the RACs and MACs.

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