Friday, August 13, 2010

Medicare Recovery Contractors to Begin Medical Necessity Reviews

Social Security opens the door to Medicare benefits for many. For younger individuals who receive SSDI, there is a 24 month wait for benefits, and for the retired population their benefits start at age 65 (though an application is required). For the past several years the Federal Government via CMS (Center for Medicare and Medicaid Services) has engaged Recovery Audit Contractors (RACs) to review payments to providers with the goal of identifying and recovering payments made in error or though improper billing practices. Until now, the RACs identified non-clinical payment issues for recovers.

Last week the CMS New Issue Review Board approved "Medical Necessity Review" Audits for 18 types of Hospital Claim and one type of Durable Medical Equipment (DME) claim. The details on which claims are to be reviewed are forthcoming, but not yet released to the public. In test iterations of medical necessity reviews, there were a number of concerns exposed, including a lack of clinical expertise as well as a lack of medicare expertise among the auditors.

The goal of such activity is ostensibly to ensure that Medicare is not paying for inappropriate or non-standard levels of care, but the natural concern that springs forth from a practice such as this is replacing the clinical knowledge of one's personal physicians with the clinical judgment of a Recovery Contractor. These contractors are paid a contingency from the proceeds of the recoveries that they identify. Though this activity is retrospective in nature, the natural results seem likely to inspire provider behavior modification, which is certainly laudable in certain cases, but in others may feel like another step toward the interference in the care of our nations Seniors and Disabled.

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