CMS Announces New Programs to Control Improper Payments

In an effort to reduce the number of payment errors, the Centers for Medicare & Medicaid Services (CMS) has announced that it will launch several demonstration programs targeting common issues like fraud, abuse and waste. According to a press release, the programs will begin on January 1, 2012.

The first program is the Recovery Audit Prepayment Review. This will allow Medicare Recovery Auditors to review claims before they are paid to ensure that all of the Medicare payment rules are followed. The program will focus on certain types of claims that previously resulted in high rates of improper payments. It will also target states with high populations of fraud- and error-prone providers — Florida, California, Michigan, Texas, New York, Louisiana and Illinois — and states that claim the most short-stay, inpatient hospital visits — Pennsylvania, Ohio, North Carolina, and Missouri. This program is designed to eliminate the typical “pay and chase” method of searching for improper payments by preventing them before they happen.

The Prior Authorization for Certain Medical Equipment program will require prior authorization for certain medical equipment for Medicare users in order to ensure that the recipient’s medical condition warrants the equipment under existing coverage guidelines. The program will apply to Medicare recipients who reside in seven states with high populations of fraud- and error-prone providers — California, Florida, Illinois, Michigan, New York, North Carolina and Texas. The goal of the program is to ensure recipients are paying an appropriate price for medical equipment that has a high error rate.

The third program is Part A to Part B Rebilling. Under the current plan, when outpatient services are incorrectly billed as inpatient services, the entire claim is denied in full. The new initiative will allow hospitals to rebill for 90% of the Part B payment when a Part A inpatient short-stay claim is denied by a Medicare representative. The program, which will be limited to a sample of 380 hospitals nationwide that volunteer to participate, is expected to lower the appeals rate, which will protect the trust fund and reduce hospital burden.

The 2012 initiatives will build on the already reduced improper payment rates achieved in 2011.

Leave a Reply

Your email address will not be published.