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August 17, 2017

CMS unveils new process for auditing Medicare claims

Daily Briefing

CMS on Monday unveiled a new process it will use to pursue cases of Medicare fraud and improper payments.

Medicare administrative contractors (MACs) currently target fraud and improper payments by randomly selecting and challenging Medicare claims. According to Modern Healthcare, the practice has led to a considerable backlog of Medicare claims appeals.

Under the new process, called Targeted Probe and Educate, MACs only will target Medicare providers and suppliers that have comparatively high error rates or billing practices that are significantly different than those of other Medicare providers and suppliers. CMS said MACs "will select claims for items/services that pose the greatest financial risk to the Medicare trust fund and/or those that have a high national error rate."

Further, CMS under the new process will work with providers to address claims errors. The agency said the new process "includes a review of 20-40 claims followed by one-on-one, provider-specific education to address any errors within the provider's reviewed claims." In addition, CMS said MACs will "educate providers throughout the probe review process, when easily resolved errors are identified, helping the provider to avoid additional similar errors later in the process."

According to RACmonitor, CMS has been testing the new process in four MAC jurisdictions. CMS said the tests have "demonstrated" success, "including an increase in the acceptance of provider education as well as a decrease in appealed claims decisions." Because of that success, CMS said it plans to launch the new process in all MAC jurisdictions before the end of this year.


Michael Munger, president-elect of the American Academy of Family Physicians, said the new process "looks like an improvement over the existing system," adding, "Physicians would only face payment reviews when their billing practices are flagged" (Dickson, Modern Healthcare, 8/15; Hirsch, RACmonitor, 8/15; CMS release, 8/14).

CMS' 2018 inpatient payment rule takes effect Oct. 1—here's how to prepare

CMS' 2018 Inpatient Prospective Payment System final rule is set to update the overall operating payment rates for the coming year—but this 1.2 percent increase is only one part of the 2,462 page rule.

Join our experts on Aug. 24 as they cover payment rate cuts and updates, changes for the Inpatient Quality Reporting program, key updates on pay-for-performance programs, and customized tools designed specifically for hospital finance leaders.

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