Following a year of little to no medical review and extensive government spending, most experts forecast reimbursement compliance audits ramping up in 2021. Multiple areas are ripe for potential scrutiny, including, but not limited to PDPM coding and supportive documentation, the proper use of SNF waivers, and appropriate access to and accounting for Provider Relief Funds.   Get the facts and ensure readiness with these insights into the current audit environment and the medical review entities that may rain on providers in the months ahead.  CMS suspended audits between March 30 and August 3 of 2020 in order to reduce provider strain during the COVID-19 pandemic. This year, however, audits are resuming in full swing.

      • Under the new Biden administration, many industry leaders and healthcare attorneys predict an uptick in audits and healthcare prosecutions with “both government initiated litigation and qui tam suits…set for continued growth in 2021” according to Georgia Ravitz et. al (i) With Xavier Becerra, a former prosecutor, appointed secretary of HHS, the government is poised to advance fraud prevention efforts.
      • False Claims Act (FCA) recoveries in FY2020 were $2.2 billion, down from $3.1 billion in 2019 and lower than any year since 2008 at a time when spending has escalated throughout the pandemic. Healthcare made up 85% of FCA recoveries in 2020 and that trend is likely to continue through both standard channels and a focus on new risk areas such as telehealth billing fraud. ii
      • Recovery Audit Contractors are now authorized to review for Medical Necessity and Documentation Requirements specific to the Patient Driven Payment Model (PDPM), and the OIG has added new focus to the Work Plan to identify program integrity risks associated with Medicare telehealth services during the pandemic.

Medical Review Entities

The Center for Program Integrity (CPI) oversees all CMS interactions and collaboration with key stakeholders relating to program integrity (i.e., U.S. Department of Justice, DHHS Office of Inspector General, State law enforcement agencies, other Federal entities, CMS components) for the purposes of detecting, deterring, monitoring and combating fraud and abuse. Data is the driving force behind current fraud detection efforts, and is instrumental in identifying both potential topics of review and specific providers to target resources toward follow up auditing and oversight.

Medicare Fee-for-Service (FFS) reviews are conducted by Medicare Administrative Contractors (MACs), the Supplemental Medical Review Contractor (SMRC), Recovery Audit Contractors (RACs), Comprehensive Error Rate Testing (CERT), and others. This link includes an interactive map that will help your facility identify the various medical review contractors for your state with links to their specific websites.

The primary CMS contractors submitting additional documentation request (ADR) letters related to Medicare or Medicaid claims include:

Comprehensive Error Rate Testing (CERT)

CMS estimates the Medicare FFS improper payment rate through the Comprehensive Error Rate Testing (CERT) program. Each year, the CERT program reviews a statistically valid stratified random sample of Medicare FFS claims to determine if they were paid properly under Medicare coverage, coding, and payment rules.

Each year, the CERT program publishes a national Medicare FFS improper payment rate in the HHS Agency Financial Report, as well as detailed information in the annual Medicare FFS Improper Payments Report. Chapter 12 of the Medicare Program integrity manual reviews the CERT program in greater detail.

The Medicaid CERT program is the Payment Error Rate Measurement (PERM) program. PERM uses a 17-state rotation cycle so that each state is reviewed every three years.

If You Receive a Letter from CMS Regarding CERT Medical Review, don’t ignore it. It’s not your FI/MAC, but they do have the authority to request records and ultimately, to deny claims.  The letter will provide a clearly defined list of the documentation required to comply with the request and where to submit the information.

Medicare Administrative Contractors (MACs)

CMS relies on a network of MACs to serve as the primary operational contact between the Medicare FFS program and the health care providers enrolled in the program.  MACs are multi-state, regional contractors. They are responsible for the receipt, processing, and payment of Medicare service claims under the Medicare Part A and Part B programs. In addition to providing claims processing, they enroll providers; educate them about coverage and appropriate billing; answer beneficiary and provider inquiries; and detect improper payments, fraud, and abuse. MACs are required to verify inappropriate billing and develop interventions to correct the problem.

Each MAC is required to perform certain data analysis and engage in ongoing medical review. Providers are selected for medical review based on claims analysis that may include atypical billing patterns, consistent errors in billing and coding, or an unusual volume in billing specific types of services.

Providers can find specific Medical Review guidance for the MACs in Chapter 6 of the Medicare Program Integrity Manual. As of December 2020, there were 12 A/B MACs identified on the CMS website.

Targeted Probe & Educate (TPE)

Beginning in Nov. 2017, a targeted probe approach went into effect for all MACs. The TPE involves the selection of review topics based on data analytics, and focusing ADR activity on providers with the highest claim error rates or outlier billing practices. This process eliminates the burden to providers and suppliers who, based on data analysis, are already submitting claims that are compliant with Medicare policy. Under the TPE strategy, MACs conduct up to three rounds of review of 20-40 claims per round, with one-on-one education provided at the end of each round. Providers with moderate or high error rates will move on to additional rounds of 20-40 reviews which will again be followed by one-on-one education. If continued high error rates are seen after three rounds of TPE, the provider may be referred to CMS for additional action such as 100% prepay review, extrapolation, or referral to other review contractors e.g., RAC or UPIC. If low error rates or sufficient improvements are observed, a provider may be removed from the review process following any of the three rounds of probe review.

Chapter 3.2.5 of the Medicare Program Integrity Manual explains the TPE review process in detail. The TPE webpage also includes an educational video, as well as responses to FAQ.

Recovery Auditors Contractors (RACs)

CMS uses the Recovery Audit program to detect and correct improper payments in the Medicare FFS program and provide information to CMS and review contractors that could help protect the Medicare Trust Funds by preventing future improper payments. In general, each RAC is responsible for identifying Medicare overpayments and underpayments and for highlighting common billing errors, trends, and other Medicare payment issues in approximately one quarter of the country. In addition to collecting overpayments, the data generated from RAC audits allows CMS to make changes to prevent improper payments in the future. The RACs are paid on a contingency fee basis and, therefore, only receive payment when recovery is made.

For additional information on the Recovery Audit Program, see Chapter 3 of the Medicare Program Integrity Manual. CMS also maintains a list of Approved RAC Topics and Proposed RAC Topics. The RAC webpage also displays each of the four RAC regions and identifies the contractor responsible for recovery activities in that region.

Supplemental Medical Review Contractor (SMRC)

The SMRC conducts medical review of Medicare Part A and B claims nationwide. The SMRC evaluates medical records to determine whether Medicare claims were billed in compliance with coverage, coding, payment, and billing rules. The focus of the medical reviews may include vulnerabilities identified by CMS internal data analysis, the Comprehensive Error Rate Testing (CERT) program, professional organizations and Federal oversight agencies. The SMRC may also carry out other special projects to protect the Medicare Trust Funds as directed by CMS.

The SMRC shares the results with the MACs for claim adjustment. The providers receive detailed review result letters from the SMRC and demand letters for overpayment recovery from the MAC. These letters include educational information to providers regarding what was incorrect in the original billing of the claim.

The current contract is awarded to Noridian Healthcare Solutions, LLC (Noridian). Chapter 3 of the Medicare Program Integrity Manual explains the basic medical review rules that the SMRC must follow.

Unified Program Integrity Contractors (UPICs)

The primary goal of the UPIC is to identify cases of suspected fraud, waste and abuse, develop them thoroughly and in a timely manner, and take immediate action to ensure that Medicare Trust Fund monies are not inappropriately paid. Payment suspension and denial of payments and the recoupment of overpayments are examples of the actions that may be taken in cases of suspected fraud. Once such actions are taken, cases where there is potential fraud are referred to law enforcement for consideration and initiation of criminal or civil prosecution, civil monetary penalties, or administrative sanction actions. Each investigation is unique and tailored to the specific circumstances.

The UPIC contracts operate in five separate geographical jurisdictions in the United States and combine and integrate functions previously performed by the Zone Program Integrity Contractor (ZPIC), Program Safeguard Contractor (PSC) and Medicaid Integrity Contractor (MIC) contracts. The current UPICs are Qlarant Integrity Solutions (West and Southwest); CoventBridge (Midwest); Safeguard Services (Northeast and Southeast).

Chapter 4.2.2 of the Medicare Program Integrity Manual offers a detailed summary of UPIC responsibility. Chapter 1 of the Medicaid Program Integrity Manual identifies UPIC responsibility related to Medicaid.

In 2021, the accuracy of coding, documentation and data monitoring is more vital than ever before.  Medical Review Contractors will continue to develop strategies using improper payment data to target the areas of highest risk and exposure. Provider data outliers will also continue to trigger audits, and any coding that drives payment, or supports skilled services on the MDS will potentially be reviewed. Inadequate coding and documentation will result in denials with a direct impact to your bottom line.

Proactive’s experts offer remote audit solutions for coding and documentation compliance and reimbursement accuracy. Contact us today to learn more about our quality assurance audits or for information on Medical Review support services including ADR preparation and Appeals management.



Blog by Stacy Baker, OTR/L, RAC-CT, CHC, Proactive Medical Review

Click here to learn more about Stacy and the rest of the Proactive team.