RAC redux: CMS cuts providers some slack

Thursday, May 6, 2010

BALTIMORE - One piece of good news emerged from this week's RAC 101 conference call for DME providers: Starting this fall, the recovery audit contractors (RACs) will not review claims that are more than three years old, CMS officials said.

To try and minimize the burden on providers, the maximum "look-back period" will be Oct. 1, 2007, they told listeners.

Providers have complained about the difficulty, in the event of an audit, of producing additional documentation, like progress notes from physicians, for claims that are more than a few years old.

After a provider asked CMS officials when the clock starts ticking on the "look-back period," however, it wasn't clear whether the restriction would help providers that much.

"Is this based on the initial setup of the equipment or an individual rental episode?" asked Kimberly Rogers-Bowers of Apria Healthcare.

"It's the claim's paid date, if that helps at all," said Scott Wakefield of CMS.

Bowers: "That helps, but keep in mind that in the DME world, with renting equipment, we could have an oxygen patient that could have been setup for seven or eight years and if the RAC is going back and asking for information from the physician's records, it's very challenging to obtain that information, because they don't keep it on file. We may have the appropriate CMN, but often, if they're looking for additional information, it's often challenging to produce, if you're basing it on a rental episode vs. the initial setup of the equipment."

Wakefield: "Right, Kimberlie, you raise a good point. If you receive an additional documentation request letter, you won't see a list of items that you should provide. Essentially, a provider will want to give any documentation that they feel will substantiate valid payment of a claim, including any record before the actual claims paid date. If you feel that would help substantiate payment of a DME claim, then I would suggest digging back and finding that information."

Other questions from the call:

*    Is extrapolation part of the RAC process? It's permissible, but it hasn't been used so far.

*    Under what circumstances do the RACs have to return their contingency fees? If they lose at any level during the appeals process, they must return their contingency fees to CMS.

*    For institutional providers, the RACs must also limit their requests for additional documentation to 1% of claims submitted for the previous calendar year divided into eight periods (45 days) based on tax ID numbers and zip codes. When will CMS establish limits for DME providers? It will establish limits in the next month.

*    When does interest start accruing for an overpayment? Interest starts accruing on the date of the demand letter.