Freeze proposed on Medicare audit program

A federal legislator has proposed legislation that would place a one-year national freeze on Medicare's recovery audit program, which has drawn criticism from many observers for the way it rewards recovery contractors. The program, which started in 2005, now includes providers in California, Florida, New York, Massachusetts, South Carolina and Arizona. As things stand, the pilot program will be expanded to a total of 19 states by the spring, and would add yet another five states by the end of the year.

However, opponents of the audit program have argued that contractors have too much of an incentive to challenge provider payments, given that they get 20 percent of any funds they get back for Medicare. Meanwhile, sponsor Rep. Lois Capps (D-CA) notes that the program is imposing particular harm on rehab providers, as 88 percent of all challenged payments are requested by such facilities. Not only that, providers are forced to turn over challenged payments immediately, and can only get them back after moving through an appeals process. CMS Administrator Kerry Weems, for his part, is trying to mollify such critics by making changes in the program. For example, he's noted that once the program goes national, all contractors will be required to have a staff medical director. Also, CMS will limit how far back auditors can search for errors to three years. What's more, records filed before Oct. 1, 2007, would be exempt.

To learn more about the proposed audit freeze:
- read this Kaiser Daily Health Policy Report item

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