Medicare Compliance & Reimbursement

... but CMS may examine medical necessity of the claims.

Good news for hospitals: Medicare's new "bounty hunters" may not have your names on their hit list.

The Recovery Audit Contractors have aroused apprehension because their payment comes in the form of a proportion of the funds they recoup from providers. But at an April 28 special Open Door Forum on the RACs, the Centers for Medicare and Medicaid Services revealed:

that the RACs have chosen to focus on hospital inpatient claims for now. The contractors have the discretion to zero in on whatever area of Medicare they feel will be most fruitful. Former CMS Administrator Tom Scully, calling into the forum, said he expected the RACs to focus on physician claims because these account for a high proportion of all Medicare claims. But CMS officials said the contractors are more interested in hospital claims. 

that the RACs will not audit evaluation and management code levels. But they may look at E/M visits to ascertain whether they should have been bundled with a surgical procedure, or were medically necessary.
 
No Fraud, Abuse Checks Yet Also, the RACs won't be looking for fraud and abuse, only incorrect coding. And they won't be performing pre-payment audits, only post-payment ones. Hospitals shouldn't hear from the RACs about a claim that the carriers or other contractors have already examined. In addition the RACs should follow all Medicare rules, including the National Correct Coding Initiative and all Medicare appeals procedures.

The RACs are operating in New York, Florida and California for the next three years as a demonstration project. CMS said that physician claims will be chosen on the basis of where their carrier is located.