Home Health & Hospice Week

Contractors' $700 million savings for Medicare could spell bad news for providers.

Home care providers that have been safe from Recovery Audit Contractors' clutches may not be much longer.

RACs recovered nearly $700 million in improper Medicare payments from providers between 2005 and 2008, the Centers for Medicare & Medicaid Services crows in a release.

The vast majority of the funds--85 percent--came from inpatient hospitals. Another 6 percent came from inpatient rehab facilities and 4 percent from outpatient hospital departments, CMS says.

Providers appealed only 14 percent of RAC determinations, CMS says. About one-third of those were successful.

CMS has learned some important lessons from the three-year RAC demonstration that it will apply when the program becomes permanent by 2010, says CMS Acting Administrator Kerry Weems. For example, CMS will retain a validation contractor to review RACs' decisions, will require RACs to hire medical directors and will limit retrospective reviews to three years.

While home care providers have been exempt from RAC review under the demonstration, the potential for recoveries is bound to put them under scrutiny once the contractors become permanent, industry veterans predict.

But that permanence may be in question. House Democrats have requested that the Government Accounting Office review the RAC program to make sure CMS makes improvements.

Providers have complained that RACs use unqualified personnel to review claims and deny claims in violation of Medicare rules and policy, says the letter authored by House Democratic leaders, including Ways and Means Health Subcommit-tee Chair Pete Stark (D-CA).

And providers have claimed RACs are glorified bounty hunters, since they receive a contingency payment based on the amount of recoveries they make.

CMS has overstated the RAC program's savings as well, the letter adds. Many claims counted toward the figure are still in the appeals process, which has a pretty high success rate.

More information on the RAC program, including the demonstration evaluation report with the savings figures, is at www.cms.hhs.gov/RAC. • Suppliers of CPAPs may see increased demand after a shift in Medicare coverage policy. CMS has approved coverage of continuous positive airway pressure devices based on home testing, according to July 3 Transmittal No. 86 (CR 6048).

Formerly, Medicare covered CPAPs based only on sleep lab testing. Now it covers the devices based on a positive result with a Type II, Type III, or Type IV unattended home sleep monitoring device.

The specific criteria for a positive result are in the memo at www.cms.hhs.gov/transmittals/downloads/R86NCD.pdf. A related MLN Matters article which includes home sleep testing G codes is at www.cms.hhs.gov/MLNMattersArticles/downloads/MM6048.pdf.

The coverage applies for service dates of March 13, 2008 and later. • You have another few months to switch to the new CMS 855 form. "CMS has issued an extension allowing Medicare contractors to continue accepting [...]