CMS Shelves RAC Prepayment Review Demonstration

Update: CMS has since announced the RAC Prepayment Review demonstration will move forward on or after June 1, 2012.

CMS recently announced that it will delay its Recovery Audit Prepayment Review demonstration after it was inundated with comments and suggestions.

On Nov. 15, 2011, CMS announced it would launch three different demonstration projects. The RAC Prepayment Review program would allow RACs to review claims before they are paid to ensure the hospital or provider complied with all Medicare payment rules. The RACs would conduct prepayment reviews on certain types of claims that historically result in high rates of improper payments, such as cardiac and orthopedic procedures.

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CMS will now give at least 30 days notice before the demonstration begins in the seven states with high populations of fraud- and error-prone providers (California, Florida, Illinois, Louisiana, Michigan, New York and Texas) and four states with high claims volumes of short inpatient hospital stays (Missouri, North Carolina, Ohio and Pennsylvania).

CMS also announced that its Prior Authorization of Power Mobility Devices demonstration will also be delayed until further notice. The Part A to Part B Rebilling demonstration, which will allow hospitals to rebill for 90 percent of the Part B payment when a Medicare RAC denies a Part A inpatient short stay claim, still began on Jan. 1.

Related Articles on RACs:

CMS Revises Medicare RAC Letters

Medicare RACs Collect $797.4M in Overpayments in FY 2011

CMS to Launch Three Demonstration Programs to Curb Improper Payments

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