In these reviews, a RAC auditor retroactively examines a Medicare claim to determine if services provided to a beneficiary were medically necessary as defined by Medicare guidelines in effect at the time of service, according to the release. During CMS’ three-year review, 32 percent of denials were for a medical necessity.
However, a CMS-sponsored study of medical necessity denials of inpatient rehabilitation facility claims performed by the California demonstration RAC found a 40 percent error rate and raises concerns whether RAC auditors can effectively judge a treating physician’s clinical decisions from three years ago, according to the report.
Under the permanent program, the review period is three years, but RACs may not examine claims paid prior to Oct. 1, 2007.
Read the AHA release about the 2010 RAC medical necessity reviews.
