Per the Centers for Medicare & Medicaid Services (CMS) announcement, aggressive new steps to find and prevent waste, fraud and abuse in Medicare are underway. CMS states they are working closer with beneficiaries and providers; consolidating its fraud detection efforts; strengthening its oversight of medical equipment suppliers and home health agencies; and launching the national recovery audit contractor (RAC) program.
"Because Medicare pays for medical services and items without looking behind every claim, the potential for waste, fraud and abuse is high," said CMS Acting Administrator Kerry Weems. "By enhancing our oversight efforts we can better ensure that Medicare dollars are being used to pay for equipment or services that beneficiaries actually received while protecting them and the Medicare trust fund from unscrupulous providers and suppliers."
Medicare is required by law to pay claims to health care providers for services provided to beneficiaries within 30 days after the claim is submitted, as long as the claim meets Medicare's rules. After the claim is paid, CMS or its contractors can review the claim to ensure that the items or services were actually provided or the services were medically necessary.
In Section 306 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), Congress directed DHHS to conduct a 3-year demonstration using RACs to detect and correct improper payments in the Medicare FFS program. Congress gave CMS the authority to pay each RAC on a contingency fee basis, which is a percentage of the improper payments corrected by the RACs.
CMS designed the RAC Program to:
1) Detect and correct past improper payments in the Medicare FFS program; and
2) Provide information to CMS and Medicare contractors that could help protect the Medicare Trust Funds by preventing future improper payments thereby lowering the Medicare FFS claims payment error rate.
RACs succeeded in correcting more than $1.03 billion of Medicare improper payments. Interesting, CMS reports that approximately 96 percent of these improper payments were overpayments collected from providers, while the remaining 4 percent were underpayments repaid to providers.
In addition to the above efforts, CMS also announced the consolidation of the work of Medicare's program safeguard contractors (PSCs), and the Medicare Drug Integrity Contractors (MEDICs) with new Zone Program Integrity Contractors (ZPICs). The new contractors will eventually be responsible for ensuring the integrity of all Medicare-related claims under Parts A and B including skilled nursing facilities.
Harmony urges facilities to protect themselves and institute policies for regularly scheduled record reviews and internal audits. Implementation of triple or even quadruple checks will secure payments and avoid revenue take-backs for the healthcare services provided.