CMS considers giving extra incentive to auditors

Sunday, November 20, 2005

BALTIMORE - CMS may offer financial incentives to auditors who discover underpayments to providers. Currently, the Recovery Audit Contractors receive only a percentage of recovered overpayments.

CMS discussed the possibility at a special Open Door Forum on Friday that addressed its Recovery Audit Contractors: 3 Year Demonstration Project.

The demo came out of the MMA, which required the use of contractors to identify Medicare underpayments and overpayments. The project began in March 2005 and runs through March 2008. CMS has been visiting the three demo states--California, New York and Florida--to make sure providers understand the project.

CMS started sending providers demand letters and medical record requests this month as part of the demo.

"Our goal is to not be obtrusive to the business of providers," a CMS official said Friday. "We need to do this demo as required by Congress and we will do it in a very collegial way. That is our goal."

CMS officials stressed that all other Medicare rules regarding the opening of a claim must be followed.

"It's the same process that the FI or carrier or DMERC would use when identifying a Medicare overpayment," a CMS official said during the forum. "The only difference is that there is another entity reviewing the claim. The normal appeals and the provider repayment process are still in place. The demo is not designed to change the 60-day timeframe of the claims process."

There are two provisions to the demonstration. The first is the Medicare Secondary Payer in which MSP contractors in California and Florida will identify situations where another employer or insurer should have paid primary on the claims. The second is the Recovery Audit Contracts in all three states where claims will be reviewed to identify situations where Medicare has overpaid or underpaid a claim. RACs will not actively search for fraud.

CMS will provide Congress with a report within six months of the end of the demonstration.