CMS fights to preserve Medicare audit program

In CMS's view, the Medicare recovery audit program is working just fine. Over the last year, contractors collected $371.5 million in allegedly improper Medicare payments from providers in California, Florida and New York, a number which, in the view of CMS Administrator Kerry Weems, shows that the program is a success. If it gets its way, CMS soon will be rolling the audit program to more than a dozen additional states. However, the program has upset more than a few stakeholders, worried that contractors may be unfairly targeting legitimate claims to collect their 20 percent commission. They're also furious that contractors get to collect the money immediately, then force hospitals to go through appeals if they want it back. Not only have hospitals complained bitterly, at least one federal legislator isn't happy with the arrangement. Rep. Lois Capps (D-CA) has filed a bill calling for a one-year moratorium on the program.

CMS, for its part, is retooling the program to address critics' concerns. Perhaps most importantly, the agency is working on regs that would allow providers to defer repayment of contested claims until the appeals process is completed. It will also require contractors to have a medical director on staff, limiting how far back auditors can delve into claims (three years), and barring audits of claims before Oct. 1, 2007.  Whether these proposals will help keep the program alive is anyone's guess.

To learn more about the controversy:
- read this Associated Press article

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