By: Lisa Eick, RN – Clinical Consultant
So, the RACs are back! What does this mean for the home medical equipment, home health and hospice providers? As of this writing there are no issues approved by CMS for the RAC, Performant, for home health and hospice, although DME isn’t so lucky (see previous blog post). The first RAC audits will begin in March, and new ones will not begin until CMS approves the issues and notifies Performant.
What is important for suppliers and agencies to understand is how CMS calculates the number of claims for ADR review.
- The baseline annual ADR limit is one-half of one percent (0.5%) of the provider’s total number of Medicare claims paid in the previous year. This is determined by the six-digit CMS Certification Number (CNN) or Provider Transaction Access Number (PTAN) and the provider’s National Provider Identifier (NPI) number.
- ADR letters are sent to providers on a 45-day cycle. RACs may go longer than 45 days between cycles but not less than 45 days between ADR requests.
- ADR limits are determined by all claim types based on the types of bills submitted in the previous year. The look-back period is limited to three years from the date the claim was paid using the 0.5% baseline criteria.
- After three, 45-day cycles, the adjusted ADR limits are determined. The provider denial rate is calculated, which identifies compliance with CMS requirements. It is calculated by using the number of claims that were improperly paid (minus any overturned during appeal) divided by the total number of claims reviewed. The adjusted ADR is used for the next three ADR cycles.
- RACS may choose to conduct reviews on either the annual ADR limit or the adjusted ADR limit. If using the adjusted ADR limit, a six-month look-back period is used for review. When using the annual ADR limit, the recovery auditors use a three-year look-back period.
As providers prepare for the return of the RACS, remember The van Halem Group has both proactive and reactive RAC audit protection services available to suppliers and providers. Please contact us for more information at (404) 343-1815 or http://www.vanhalemgroup.com/contact-us.
Source: https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Recovery-Audit-Program/Downloads/Institutional-Provider-Facilities-ADR-Limits-May-2016.pdf; accessed 2/21/17.