Home Health & Hospice Week

Providers blast project's one-sided approach to claims accuracy.

Recovery audit contractors get financial rewards when they ferret out Medicare overpayments to durable medical equipment providers. But they may soon have a cold, hard motive to sniff out underpayments, too.

During the Centers for Medicare & Medicaid Services' Nov. 18 special Open Door Forum on the recovery audit contract initiative demonstration project, Jerry Walker with the CMS Office of Financial Management said his agency is exploring ways to give recovery auditors financial incentives for identifying underpayments. The auditors receive a fee based on the percentage of overpayments they recover, but there is currently no financial incentive for finding underpayments.

The agency is "exploring" the incentives and does not have all the details yet, Walker reported. "Obviously there are contractual issues and some other things we need to work out, but we believe we have a solution for financial incentives, and I think that's welcome news for everyone," he added.

The RAC initiative is a three-year-long demonstration project that began earlier this year in California, Florida and New York for hospitals, physicians and DME providers (see Eli's HCW, Vol. XIV, No. 17).

Several of the forum's attendees complained that CMS is just getting around to creating incentives for RACs to find underpayments. They included David Scarpino, vice president for finance and chief financial officer of St. John's Riverside Hospital in Yonkers, NY.

"There's no symmetry here--this is clearly an effort to recover money from [providers]," said Scarpino, who also objected to providers not being allowed to bring self-discovered underpayments to the RACs' attention. "It's not meant to be fair, and it's not going to be fair."

You Get A RAC Letter--Now What?

If you receive a medical records request or an overpayment refund request from a RAC and have questions, you should call the RAC and not your carrier. All RACs have toll-free numbers and must be open between the hours of 8 a.m. and 4:30 p.m.

When the RAC demonstration concludes in 2008, CMS will report to Congress on the project's success. "We're not looking only at the bottom line of money returned to the trust fund, but also at the effect on the provider community," Walker said.

The contractor hired to help CMS evaluate the project next year will begin sending surveys to providers in affected states to collect their feedback.