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RAC Audit Stoppage Not Likely to Affect Therapy ADR

February 20, 2014 2 Comments

CMS announced this week that the Recovery Audit program (RACs) would pause for a period of time so that the currentCaution ADR requests can process through the RAC reviews.  RAC audit stoppage is not likely to affect therapy ADRs.  In what might have been a false sense of “freedom” rehab providers reading RAC Monitor’s special article today were jumping for joy.  A Chicago provider invited me to come on down and pop the bubbly with them!  Don’t throw the confetti just yet!  CMS explains the pause is this fashion:

CMS is in the procurement process for the next round of Recovery Audit Program contracts.  It is important that CMS transition down the current contracts so that the Recovery Auditors can complete all outstanding claim reviews and other processes by the end date of the current contracts.  In addition, a pause in operations will allow CMS to continue to refine and improve the Medicare Recovery Audit Program.

According to CMS February 21st is the last day a post-payment Additional Documentation Request (ADR) may be sent; February 28 is the last day a MAC may send prepayment ADRs for the Recovery Auditor Prepayment Review Demonstration.  And finally June 1 is the last day a Recovery Auditor may send improper payment files to the MACs for adjustment.

WOW! Are we finally free from manual medical review of therapy at the $3700 thresholds?  Will the RAC reviews stop, as well as all the problems that the therapy community is having in a program that the RACs likely don’t care about either (who looks forward to a 10% bounty on a $100 claims?).  Caution, not so fast.

RAC Audit Stoppage Not Likely to Affect Therapy ADR

Manual medical review at the $3700 threshold is not a RAC program.  In fact it was mandated by law originally under American Taxpayer Relief Act (ATRA), then extended through 3/3/12014 by the SGR legislation. The original ATRA legislation called for the MACs to do this, and with congressional approval, the program went to the RACs on 4/1/2013 for processing. Manual medical review is not under the RAC program Statement of Work, and normal RAC rules do not apply, particularly with respect to those in prepayment review states.  So here are some thoughts:

  • The RAC post-payment review ADR process ends on 2/21/2014.
  • The RAC pre-payment review ADR process ends on 2/28/2014.
  • HOWEVER – the manual medical review process, by law, continues until 3/31/2014.

Houston – we have a problem.  Part of the problem is bundled up in current legislation approved by the Congress to “fix” the Sustainable Growth Rate” formula for the Medicare Physician Fee Schedule, that was silent on therapy extendors.  In other words, the legislation that will fix the fee schedule contained no provision for the extension of the therapy caps exceptions process, or the continuance of manual medical review.  If manual medical review of therapy claims at $3700 reverts back to the MACs (if the Congress extends this past 3/31/2014), we are likely back at the MACs, who were originally charged with doing manual medical review.  All those reviews were done, by law, on a pre-payment basis.  If not the MACs, then who?  CMS has other specialty contractors that the therapy community is familiar with: Strategic Health Solutions reviewed therapy claims in 2013 when therapy had stopped prior to 12/2012, and then resumed in early 2013.  They also reviewed therapy claims that were submitted during Super Storm Sandy in greater New York area.

A final caution, just in case you forgot, our friends at the Medicare Payment Advisory Commission (MedPAC) have made it clear that, and have recommended 3 times this past year in Congressional testimony and reports that they prefer a $1270 hard therapy cap and mandatory manual medical review prior authorization…..

How are you receiving the news at your facility?  Have you received all your post-payment review requests for 2013?  Do expect a windfall of requests in the next day?  We know the RACs have lagged on this.  How many RAC ADR requests have you received?  Are they being adjudicated timely for prepayment review?  Did the dog eat your fax?  Let me know…..


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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. We have two patients who exceeded the threshold in 2013 due to being very complicated cases. I’ve had a couple of issues. For one patient, I’ve been getting duplicate ADR’s from CMS even though I confirmed with our RAC that the records were received. So far for this particular patient, two dates are going to be paid because the auditor did not complete the review within 10 days; however several other dates have been denied as the documentation did not show medical necessity. I plan to appeal the denied dates. I discovered that it would have been in my best interest to include a coversheet referencing the dates of service in regards to each ADR (the RAC doesn’t know which dates are to be reviewed) as well as a summary/history of the patient’s condition. It would have been nice for CMS to include that on the ADR instructions.

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