CMS to Launch Three Demonstration Programs to Curb Improper Payments

CMS will launch three demonstration programs in Jan. 2012 that will try to cut improper payments and reduce overall payment errors in Medicare and Medicaid, according to a CMS news release.

The three programs include the following:

•    Recovery Audit Prepayment Review: This program will allow Medicare recovery auditors, also known as Medicare recovery audit contractors, to review claims before they are paid to ensure the provider complied with all Medicare payment rules. The RACs will conduct prepayment reviews on certain types of claims that historically result in high rates of improper payments. This program will hone in on 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).

•    Prior Authorization for Certain Medical Equipment: This program will require prior authorization for certain medical equipment for Medicare beneficiaries who live in the seven states with high populations of fraud- and error-prone providers, as listed above. This program will be implemented in two phases. The first phase, which will span the first three to nine months of the program, involves Medicare administrative contractors conducting prepayment reviews on certain medical equipment claims, and the second phase will implement prior authorization.

•    Part A to Part B Rebilling: This program will allow hospitals to rebill for 90 percent of the Part B payment when a Medicare contractors denies a Part A inpatient short stay claims as "not reasonable and necessary" due to the hospital billing for the wrong setting. This demonstration will be limited to a sample of 380 hospitals across the country.

Related Articles on Hospital Improper Payments:

Obama Administration Reports Reducing Waste by $17.6B in 2011

OIG: Cleveland Clinic Received Nearly $254k in Medicare Overpayments

Errors in Virginia's Medicaid Program May Have Resulted in up to $263M in Improper Payments in 2009

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