J.1_REGION_3_SOW.docx

Statement of Work for the Part A/B Medicare Fee-for-Service Recovery Audit Program – Region 3 Purpose The Recovery Audit Program’s mission is to reduce Medicare improper payments through the efficient detection and correction of improper payments.

The purpose of this statement of work (SOW) includes all tasks and responsibilities associated with the review of Medicare Fee-for-Service (FFS) claims submitted to the A/B Medicare Administrative Contractors (MACs) in Recovery Audit Region 3 (see map in the Appendices section). This excludes Durable Medical Equipment, Prosthetics, Orthotics, and Supply (DMEPOS) claims and Home Health/Hospice (HH/H) claims. The Recovery Auditor shall review all applicable claim types submitted to an A/B MAC through the appropriate review methods and work with the Centers for Medicare & Medicaid Services (CMS) and MACs to effectuate the adjustment of claims, recoupment of overpayments, payment of underpayments, support the appeals process and reporting the status of all reviews by updating the Recovery Audit Data Warehouse (the “Data Warehouse”) and providing monthly reports in a timely, accurate, and efficient manner.

This SOW includes the following tasks, which are defined in detail in subsequent sections:

1. The Recovery Auditor shall perform postpayment review to identify Medicare claims that contain improper payments (overpayments or underpayments), which were made under Part A or Part B of Title XVIII of the Social Security Act. This includes review of all Medicare claim and provider types (excluding DMEPOS and HH/H) and a review of claims/providers that have a high propensity for error based on the Comprehensive Error Rate Testing (CERT) program and other CMS analysis. This also includes: requesting, obtaining, storing, sharing, and paying for medical documentation (for complex reviews); communicating review statuses and results (via letters and a web-based portal) to providers; maintaining case files; participating in discussion periods with providers; and, sending claims for adjustment.

2. The Recovery Auditor shall utilize the Data Warehouse as the central repository for all claims information in the Recovery Audit Program. This includes consistently updating the Data Warehouse timely with complete and accurate claim information and statuses on all reviews to prevent interference with law enforcement/fraud investigations and duplicating work on claims that have already been reviewed.

3. The Recovery Auditor shall participate in a CMS review approval process, through which review topics must be approved before the Recovery Auditor can begin to review those topics. This process includes the preparation and submission of documents by the Recovery Auditor, detailing: the review topic; the type of review to be used for the review topic; the methodology for selecting claims for review; the methodology and rationale for identifying a claim as an improper payment; reviewing and submitting sample test claims, if required; and, participating in discussions with CMS, the MACs, and CMS Review Plan Team, as necessary.

4. The Recovery Auditor shall provide support throughout the appeals process for any improper payment that is appealed by the provider. This includes taking party status at the Administrative Law Judge (ALJ) level of appeal in a minimum of 50% of cases and participating in a minimum of 50% of the remaining cases that reach this level.

5. Recovery Auditors shall share with CMS, and the appropriate MAC, recovery audit review methodologies, algorithms, and edit parameters used to identify improper payments; and participate in conference calls with CMS and other contractors, as necessary for the purposes assisting in the development of corrective actions to reduce the instance of improper payments.

6. The Recovery Auditor shall collaborate with other CMS contractors and partners as directed by CMS for the purposes of adjusting improperly paid claims, supporting the appeals process, avoiding duplicative reviews, and referring potential fraud.

7. The Recovery Auditor shall maintain a quality customer service center to provide accurate and timely responses to CMS and provider inquiries. This includes responding to written, telephonic, and electronic inquiries within the appropriate timeframes. The Recovery Auditor shall also perform any necessary provider outreach, as instructed by CMS.

8. The Recovery Auditor shall ensure compliance with all SOW and CMS system requirements, including Information Technology (IT) systems security policies, procedures and practices. This includes participating in the necessary security testing to obtain an Authority to Operate (ATO).

9. Optional Task – Prepayment Review

10. Optional Task – Contract Closeout and Reconciliation Background Section 1893(h) of the Social Security Act authorized a nationwide expansion of the Recovery Audit Program, and required the Secretary of the Department of Health and Human Services to utilize Recovery Auditors under the Medicare Integrity Program to identify underpayments and overpayments and recoup overpayments associated with services and items for which payment is made under Part A or B of Title XVIII of the Social Security Act.

The CMS is required to actively review Medicare payments for services to determine accuracy and, if errors are identified, to pursue the collection of any payment made in error. To gain additional knowledge, offerors may research the following documents:

· The Financial Management Manual (specifically, Chapter 4, section 100) and the Program Integrity Manual (PIM) (specifically, Chapter 3) at www.cms.hhs.gov/manuals

· The Debt Collection Improvement Act of 1996

· SEC. 31001 - (3)(A)(ii)(c)(6) and (7)(A)(B)

· The Federal Claims Collection Act, as amended and related regulations found in 42 CFR

· Title 42 CFR Subpart D – Medicare Integrity Program Contractors

· Title 42 CFR Subpart E – Medicare Administrative Contractors

· Comprehensive Error Rate Testing Reports (see www.cms.hhs.gov/cert)

· Recovery Audit Program Status Documents and Reports to Congress (see http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Recovery-Audit-Program/ )

· Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191), Title 2 -- PREVENTING HEALTH CARE FRAUD AND ABUSE; ADMINISTRATIVE SIMPLIFICATION; MEDICAL LIABILITY REFORM

· Subtitle C – Data Collection

· Subtitle F – Administrative Simplification

Throughout this document, the term “improper payment” is used to refer collectively to overpayments and underpayments. Situations where the provider submits a claim containing an error (such as an incorrect code, or incorrect/missing modifier), but the payment amount is not altered by the error, are not considered improper payments for the Medicare FFS Recovery Audit Program.

General Requirements Independently and not as an agent of the Government, the contractor shall furnish all the necessary services, qualified personnel, material, equipment, and facilities, not otherwise provided by the Government, as needed to perform all requirements of this SOW. CMS will provide minimum administrative support, which may include standard system changes when appropriate, help communicating with Medicare contractors, policy interpretations as necessary and other support deemed necessary by CMS to allow the Recovery Auditor to perform their tasks accurately and efficiently. The CMS will support changes it determines are necessary but cannot guarantee timeframes or constraints. In changing systems to support greater efficiencies for CMS, the end product could result in additional administrative tasks being placed on the Recovery Auditor that were not previously present. These administrative tasks will be within the scope of this contract and will be applicable to the identification and recovery of improper payments.

A. Initial Meeting with CMS The Recovery Auditor’s key project staff (including overall Project Manager and other key personnel) shall meet at CMS in Baltimore, Maryland with the CMS Contracting Officer Representative (COR) and appropriate CMS staff within two weeks of the date of award to discuss the project plan. The specific focus will be to discuss the timeframes for the tasks outlined below. Within two weeks of this meeting, the Recovery Auditor shall submit a formal project plan outlining the resources and timeframe for completing the work outlined. The initial project plan will be for the base year of the contract. The project plan is an evolving document and will serve as a snapshot of all proposed, and approved, review topics that the Recovery Auditor is identifying at the time. It is the Recovery Auditor’s responsibility to update the project plan as new review topics are approved. The initial project plan and any subsequent updates must be approved by CMS prior to implementation.

1. Project Plan The project plan shall include the following:

a. Detailed quarterly projection by review topics (e.g., excisional debridement); b) type of review (automated, complex, extrapolation); c) type of error (medical necessity, incorrect coding)

b. Provider Outreach Plan – At a minimum, the base provider outreach plan shall include potential outreach efforts to associations, providers, Medicare contractors, and other applicable Medicare stakeholders.

c. Recovery Auditor Organizational Chart – At a minimum the organizational chart shall identify the names and titles of key personnel and the organizational structure of the Recovery Auditor. Within two weeks of the initial meeting, the Recovery Auditor shall submit a detailed organizational chart extending past the key personnel to at least first-line management, as well as a contingency plan for dealing with unexpected changes in any key personnel for COR approval.

B. Transitions Recovery Auditor Transition From time to time in the Recovery Audit Program, CMS will need to transition work from the outgoing Recovery Auditor to a different incoming Recovery Auditor. This happens when the incumbent Recovery Auditor ceases work under the contract and the new Recovery Auditor begins work. The term “transition” will be applied to describe the coordination of work duties during the overlapping period when one Recovery Auditor’s contract is ending and another Recovery Auditor’s contract begins. It is in the best interest of all parties to ensure that transitions occur smoothly.

In order to ensure a successful transition, the outgoing contractor shall cooperate fully with the incoming contractor during the transition period. A transition is successful when the transfer of Medicare data, records, and operational activities from the outgoing contractor to the incoming contractor and/or CMS is accomplished so that:

The base year and option year one of this contract may overlap with the transition years of the preceding Recovery Audit program contract; however, outstanding claims and appeals will not transition to the incoming Recovery Auditor (See Task 11).

a. Transition Plan and Stakeholder Communications The incoming Recovery Auditor shall submit a Transition Plan within fourteen (14) days of the Initial Meeting referenced above (General Requirements, Section A). The Transition Plan will include recommendations of specific dates regarding the initial of Joint Operating Agreements (JOAs) with the MACs and related contractors, provider outreach, provider communication, and submission of review topics for approval.

During the transition period, the Recovery Auditor shall hold weekly transition status teleconferences or meetings with the outgoing Recovery Auditor and CMS. The outgoing contractor will assist the incoming contractor in organizing, hosting, and providing toll-free telecommunication lines and facilities for transition meetings. The meetings will follow a prepared agenda to discuss the status of the major tasks, issues, deliverables, schedule, delays, problem resolution and risk mitigation and/or contingencies. The outgoing contractor shall assist in providing meeting agenda items for all meetings at least two business days before the meeting. The incoming contractor shall issue meeting minutes to all stakeholders within two business days after the meeting.

The outgoing and incoming contractor shall provide CMS with a bi-weekly closeout project status report organized by major closeout tasks. The report shall include a detailed discussion of outstanding issues, deliverables, problem resolution, and risk mitigation/contingency plans as appropriate.

MAC Transition (Impact on the Recovery Audit Program) The CMS will occasionally transition the claim processing workload from one MAC to another. The CMS will review each transition, independently taking into account the outgoing and incoming contractor, the impact on the provider community, historical experience and the Recovery Auditor’s relationship with the involved contractors to determine the impact on the Recovery Audit Program. The impact on the Recovery Auditor may vary from relatively minor or no impact to a work stoppage in a specific area for a 3-6 month period of time. CMS will determine the impact to the Recovery Audit Program within 60 days of the announcement of the upcoming MAC transition and share that information with the Recovery Auditor. The affected Recovery Auditor shall submit a transition plan to CMS for approval, based on CMS’ determination. The lack of an approved transition plan may result in a minimum transition time of six months.

C. Conference Calls On a weekly basis, unless otherwise instructed by CMS, the Recovery Auditor’s key project staff will participate in a conference call with the CMS COR to discuss the progress of work, evaluate any problems, and discuss plans for immediate next steps of the project. The Recovery Auditor will be responsible for setting up the conference calls, preparing an agenda, documenting the minutes of the meeting, and preparing any other supporting materials as needed.

At CMS’ discretion, conference calls may be scheduled more frequently. Additional conference calls may be held to discuss individual items and/or issues.

D. Monthly Progress Reports

1. The Recovery Auditor shall submit monthly administrative progress reports outlining all work accomplished during the previous month. These reports shall include the following information:

Complications completing any task

a. Communication with MAC/Qualified Independent Contractor (QIC)/Administrative QIC (ADQIC)

b. Upcoming provider outreach efforts

c. Update of project plan

d. Detailed report on discussion periods, including: the number of requests received (per new issue number), discussion period outcomes, information submitted by provider during discussion, and detailed rationale for any overturned decisions.

e. Update of audit topics being reviewed in the upcoming month

f. Recommended corrective actions to prevent or reduce improper payments for each review topic (e.g., Local Coverage Determination (LCD) change, system edit, provider education)

g. Possible issues not reviewed due to potentially ineffective policies*

h. Update on Joint Operating Agreements (JOAs)

i. Action items

j. Number of fraud referrals submitted to the CMS COR

*The Recovery Auditor shall also report on LCDs or other policies that may benefit from CMS evaluation and identify their characteristics (outdated, technically flawed, etc.). If a LCD is outdated, technically flawed or provides limited clinical details it will not provide optimal support for medical review decisions. Identification of these LCDs will improve the integrity of the Medicare Program and the performance of the Recovery Audit Program.

2. The Recovery Auditor shall submit monthly appeals reports. These reports shall be broken down by MAC jurisdiction into the following categories:

1. A listing of appeal record requests from the MAC by review issue number for the month A listing of appeal record requests from the MAC to which the Recovery Auditor has responded, by review issue number for the month A listing of all appeals dispositions by review issue number and level of appeal for the month Total number of appeals dispositions by review issue number from inception to date A listing of all ALJ hearings (by claim number and review issue number) in which the Recovery Auditor took party status A listing of all ALJ hearings (by claim number and review issue number) in which the Recovery Auditor participated

At CMS discretion, a standardized monthly report(s) may be required. If a standardized monthly report is required, CMS will provide the format. Changes in the report format will be communicated no less than 30 days in advance.

Unless the CMS COR approves alternative arrangements, each monthly report shall be submitted by the close of business on the fifth business day following the end of the month. The monthly report shall be sent via e-mail to the CMS COR.

E. Recovery Audit Data Warehouse CMS will provide access to the Data Warehouse. The Data Warehouse is a web-based application that houses data related to all Recovery Auditor improper payment identifications and corrections (overpayment collections and returned underpayments). The Data Warehouse is also used to prevent duplicative reviews by identifying claims as suppressions and exclusions. Suppressions are claims that have been targeted by another review entity, while exclusions are claims that have already been reviewed by another review entity. Suppressions and exclusions are not available to the Recovery Auditor for review. The Recovery Auditor shall provide the appropriate equipment to access the Data Warehouse. (More information on the Data Warehouse is located in Task 2.)

F. Data Accessibility The Recovery Auditor shall be responsible for obtaining the necessary hardware and software associated with the transfer of CMS data.

To access CMS data, the Recovery Auditor shall acquire a secure line between the Recovery Auditor and the CMS Data Center. The Recovery Auditor shall acquire the appropriate software to enter into the CMS Data Center. IBM/Sterling Commerce Connect:Direct software is currently being utilized for this purpose. There is no other alternative software. The Recovery Auditor shall incur all costs associated with the establishment and maintenance of the secure line, as well as license costs. The Recovery Auditor will be responsible for negotiating their own commercial license and cost with the vendor. These costs are not controlled by CMS and may increase at any time.

The Recovery Auditor may be required to provide testing to ensure data transfers are secure and successful. After the secure line is established, any testing is completed, and any corrective actions identified as a result of testing have been taken, CMS will provide the Recovery Auditor with all necessary data files under the terms of this contract for the applicable geographic area. The Recovery Auditor will receive new data updates on a monthly basis. The data file format, data fields available and user agreements are available upon request.

If any problems arise with the transfer of data files, the Recovery Auditor shall undertake all necessary steps in troubleshooting the cause of the problem. The Recovery Auditor shall request assistance from CMS only after all steps have been taken to ensure the problem does not originate from the contractor side. If the problem is found to have been caused by CMS, CMS will take steps to re-send the data correctly.

As CMS moves towards utilizing Enterprise Data Centers (EDC) the transmission of data may cease. The Recovery Auditor may be required to utilize a CMS system in a CMS Data Center to retrieve extracts of claims.

The Recovery Auditor shall incur any charges associated with the transfer of data. This includes, but is not limited to, cartridges, data communications equipment, lines, messenger service, mail, etc. The Recovery Auditor shall pay for all charges associated with the storage and processing of any data necessary to accomplish SOW directives. The Recovery Auditor shall establish and maintain back-up and recovery of systems in accordance with “CMS Information Security (IS) Application Contingency Plan (CP) Procedures” and “CMS Contingency Planning Tabletop Testing Procedures[footnoteRef:2].” The Recovery Auditor shall comply with all CMS privacy and security requirements. The Recovery Auditor shall provide all personal computers, printers, and equipment to accomplish the work described herein throughout the contract term. [2: http://www.cms.gov/Research-Statistics-Data-and-Systems/CMS-Information-Technology/InformationSecurity/Information-Security-Library.html

G. Geographic Region Unless otherwise directed by CMS through technical direction, the claims being analyzed for this award will be all fee-for-service Part A and B claims (excluding DMEPOS and Home Health/Hospice) processed by the A/B MACs in Region 3 regardless of the provider’s physical location. The A/B MAC jurisdictions and Recovery Audit regions can be found in Appendix 1.

H. Recovery Auditor Staff The Recovery Auditor shall ensure that the key personnel and additional personnel listed below will comprise an adequate structure to account for accurate and timely review of different claim types, customer service, and IT responsibilities.

1. Key Personnel

At a minimum, the Recovery Auditor shall designate a Project Manager and a Medical Director as key personnel. The Recovery Auditor may designate additional key personnel as necessary.

The Recovery Auditor shall submit a CMS -approved contingency plan and designate backups for each key personnel role, as directed in SOW General Requirements, Section A(1)(c). The backup shall have similar skills and knowledge as the primary key personnel to ensure, to the greatest extent possible, continuity of operations and minimal interruptions in the event of an unexpected departure of key personnel. The Recovery Auditor shall notify the COR immediately regarding any unplanned changes in key personnel, and shall notify their COR at least fourteen (14) calendar days prior to any planned changes in key personnel.

For this SOW, “fully dedicated” means that the individual identified for the position shall be a Full Time Equivalent (FTE) employee and shall only work on one Recovery Auditor contract. This individual may not perform duties on any Medicare/non-Medicare contract or commercial line of business without approval by the Contracting Officer.

a) Project Manager – The Project Manager shall be fully dedicated to this contract and shall act as a central point of contact with CMS and other stakeholders. The Project Manager shall be available to the CMS COR during normal business hours. If the Project Manager is not going to be in the office due to vacation, etc., the CMS COR will be notified at least one day in advance. In such cases, the Project Manager will designate a “back-up” person to serve as the central point of contact with CMS. Anyone serving as a back-up for the Project Manager will be required to have the ability to answer questions and/or provide data to the same degree that the Project Manager would be able to provide to CMS.

Work Experience The Project Manager shall have 10 or more years previous work experience, with at least three years’ experience as a project manager, preferably with large, complex projects. The Project Manager shall have knowledge of the Medicare program, with knowledge of CMS FFS Recovery Audit Program requirements and activities being preferable.

Education The Project Manager shall possess a bachelor’s degree from an accredited institution, plus a master’s degree from an accredited institution or substitution of four (4) additional years of related work experience in lieu of the master’s degree.

b) Contractor Medical Director (CMD) – The CMD shall be fully dedicated to this contract. The Recovery Auditor shall arrange for an alternate CMD when the prime CMD will be unavailable for an extended period. The CMD must be either a Doctor of Medicine or a Doctor of Osteopathy who has relevant work and educational experience to oversee the review of Medicare FFS claims. More than one individual’s time cannot be combined to meet the one FTE minimum. The CMD must be approved by CMS.

Primary duties include:

· Briefing and directing personnel on the correct application of policy during claim adjudication, including through written internal claim review guidelines;

· Keeping abreast of medical practice and technology changes that may result in improper billing or program abuse.

· Serving as a readily available source of medical information to provide guidance in questionable claim review situations;

· Recommending when LCDs, NCDs, provider education, system edits or other corrective actions are needed or must be revised to address Recovery Auditor identified vulnerabilities;

· Overseeing the medical review process and providing the clinical expertise and judgment to understand LCDs, National Coverage Determinations (NCDs) and other Medicare policy;

Other duties include:

· Discussing claim review determinations with providers upon request

· Interacting with the CMDs of other contractors and/or Recovery Auditors to share information on potential problem areas;

· Participating in CMD clinical workgroups as appropriate;

· Upon request, providing input to CMS Central Office on national coverage and payment policy, including recommendations for relative value unit (RVU) assignments;

· Participating in CMS/Recovery Auditor presentations to providers and associations.

To prevent conflict of interest issues, the CMD must provide written notification to CMS within three months after the appointment, election, or membership effective date if the CMD becomes a committee member or is appointed or elected as an officer in any State or national medical societies or other professional organizations.

Work Experience

· A minimum of 3 years’ experience practicing medicine as a board-certified physician with no previous sanctioning or exclusion from the Medicare program.

· Prior work experience in the health insurance industry, utilization review firm or another health care claims processing organization.

· Extensive knowledge of the Medicare program particularly the coverage and payment rules.

· Public relations experience such as working with physician groups, beneficiary organizations or Congressional offices.

Education and Licensure

· Experience practicing medicine as a board-certified Doctor of Medicine or Osteopathy or Doctor who is currently licensed to practice medicine

The Recovery Auditor shall periodically verify that the CMD’s license is current. When recruiting CMDs, the Recovery Auditor should give preference to physicians who have patient care experience and are actively involved in the practice of medicine.

1. Essential Personnel The Recovery Auditor shall appoint a Chief Information Officer and a Systems Security Officer Project Manager, as described below.

The Recovery Auditor shall have a CMS -approved contingency plan and designate backups for each essential personnel. The backup shall have similar skills and knowledge as the essential personnel to ensure, to the greatest extent possible, continuity of operations and minimal interruptions in the event of an unexpected departure of essential personnel. The Recovery Auditor shall notify the COR immediately regarding any unplanned changes in essential personnel, and shall notify their COR at least fourteen (14) calendar days prior to any planned changes in essential personnel.

a) Chief Information Officer (CIO) – The Recovery Auditor shall appoint a CIO to oversee its compliance with the CMS information security requirements. The CIO may oversee lines of business, other than this contract.

Work Experience The CIO shall possess knowledge of and extensive practical experience in information technology (IT) practices, including security controls, in large organizations and significant managerial or other practical involvement relating to IT management.

b) Systems Security Officer (SSO) – The Recovery Auditor shall designate a principal (i.e., primary) SSO qualified to manage the Medicare information security program and ensure the implementation of necessary safeguards. The Contractor’s Systems Security Officer (SSO) may oversee other lines of business, other than this contract.

The SSO shall be dedicated to assisting the CIO in fulfilling compliance with the CMS information security requirements. The SSO shall be organizationally independent of IT operations. The SSO can be within the CIO organizational domain but cannot have responsibility for operation, maintenance, or development. The SSO will perform duties in accordance with IOM Pub. 100-17, the CMS Business Partner System Security Manual (BPSSM).

Work Experience The SSO shall possess three years practical experience in information technology (IT) systems security policies, procedures and practices to manage security administrative duties in large organizations.

1. Additional Personnel

a) Coders – Each Recovery Auditor is required to employ certified coders to perform complex coding validations. Certified coders are those professionals who earn their certification from an accredited association such as the American Association of Professional Coders (AAPC) or American Health Information Management Association (AHIMA). Health care professionals are obligated to stay current in their profession. This includes continuing education in their respective discipline and keeping abreast of current medical coding updates, compliance rules, and government regulations.

Certified Coders may also be Registered Health Information Administrators (RHIA) and Registered Health Information Technicians (RHIT) who have been credentialed by AHIMA in their field of health information. These coders must have at least five years direct coding or billing experience in the specific coding field. That is, an RHIT or RHIA who will be reviewing DRG Validation must have experience in coding or billing DRGs for at least five years before performing coding review for the Recovery Auditor.

The CMS reserves the right to review the credentials of certified coders, RHIA and RHIT at any time under this SOW.

b) Registered Nurses – Each Recovery Auditor is required to employ registered nurses with previous experience in medical record review. Registered nurses are required to have current licenses in nursing in the United States. The Recovery Auditor must ensure that the license is current.

c) Therapists – Each Recovery Auditor is required to employ Therapists and other clinicians with previous experience in medical record review. Therapists are required to have current therapy licenses in the United States. The Recovery Auditor must ensure that the license is current.

d) All clinicians will be required to review medical records for medical necessity. The clinician must have an understanding of Medicare policies as well as LCDs and NCDs. Clinicians should be a resource for coders and non-clinical personnel.

e) In additional to the Medical Director, the Recovery Auditor is encouraged to utilize the expertise of a panel of clinical specialists, for consultation when performing medical review.

f) Customer Service Program Manager – The Customer Service Program Manager should have a history of providing effective oversight of customer service staff. The Customer Service Program Manager will have a focus on handling customer inquiries/ questions and the education of these customers.

Any changes to the Recovery Auditor’s organizational chart (down to the first line management) shall be submitted to the CMS COR within seven (7) business days of the actual change being made. First line management is Recovery Auditor specific and refers to any individuals charged with the oversight responsibility of audit reviewers, analysts, customer service representatives, and any other staff essential to recovery audit operations. The first line management may include personnel involved in daily communications with the CMS COR. This direction excludes changes to key personnel, which shall be communicated immediately to and approved by CMS before the transition occurs.

Specific Tasks Task 1- Identification of Improper Payments on Postpayment Review The Recovery Auditor shall pursue the identification of all Medicare claim types that contain improper payments, for which payment was made under either Part A or Part B of Title XVIII of the Social Security Act (excluding DMEPOS and Home Health/Hospice claims).

The Recovery Auditor shall comply with Reopening Regulations located at 42 CFR 405.980. Before a Recovery Auditor makes a decision to reopen a claim, the Recovery Auditor must have good cause and shall clearly document the good cause in review proposals and correspondence (review results letters, additional documentation requests (ADRs), etc.) to providers. Additionally, the Recovery Auditor shall develop processes to minimize provider burden to the fullest extent possible when identifying Medicare improper payments. This may include, but is not limited to, ensuring edit parameters are refined to selecting only those claims with the greatest probability that they are improper and that the number of additional documentation requests do not negatively impact the provider’s ability to provide care. The Recovery Auditor shall perform this analysis prior to requesting records. CMS has the authority to create/revise ADR limits at any time. ADR Limits will be provided via technical direction or as otherwise instructed by CMS.

At its discretion, CMS may impose minimum percentage review requirements by claim type. Requirements may be based on improper payment findings in the CERT program or other CMS data analysis.

The CMS will perform routine evaluations to ensure the Recovery Auditor is reviewing all claim types as directed. The CMS may allow for exceptions in the event of MAC transitions and other similar circumstances.

To assist the Recovery Audit Program, CMS works closely with the claim processing contractors to establish monthly workload figures. The workload figures are typically modified annually, with the option for further modification, as necessary. Workload limits equate to the number of claims that a claims processing contractor is required to adjust on a monthly basis. The Recovery Auditor shall assume a maximum of 14,000 claim adjustments per month, per MAC jurisdiction. Current workload limits apply only to postpayment reviews. Should the Recovery Auditor demonstrate a backlog of claims for a claims processing contractor, and have projections showing the necessity for a sustained higher monthly workload, the CMS will consider increasing future workload limits.

A. Improper payments included in this SOW Unless prohibited by Section B or Section C below, the Recovery Auditor may attempt to identify improper payments (overpayments or underpayments) that result from any of the following:

· Incorrect payment amounts, (Exception: in cases where CMS issues instructions directing contractors to not pursue certain incorrect payments made);

· Non-covered services (including services that are not reasonable and necessary under section 1862(a)(1)(A) of the Social Security Act);

· Incorrectly coded services (including DRG miscoding);

· Duplicate services

For claims from the following provider types:

· Inpatient hospital

· Outpatient hospital

· Physician/Non-physician practitioner

· Laboratory

· Ambulance

· Skilled Nursing Facility

· Inpatient Rehabilitation Facility

· Critical Access Hospitals

· Long Term Care Hospitals

· Ambulatory Surgical Center

· Other (such as Comprehensive Outpatient Rehabilitation Facilities, Rural Health Clinics, and Independent Diagnostic Testing Facilities; excluding DMEPOS, Home Health and Hospice)

The Recovery Auditor shall review all provider types listed above. The CMS conducts periodic evaluations of the Recovery Auditor’s performance. If the CMS COR determines the contractor is not effectively reviewing all claim/provider types during these evaluations, CMS will consider official contract action (see Section K of Administrative and Miscellaneous Issues).

B. Improper payments excluded in this SOW The Recovery Auditor may not attempt to identify improper payments (overpayments and underpayments) arising from any of the following:

1. Services provided under a program other than Medicare Fee-For Service – For example, the Recovery Auditor shall not attempt to identify improper payments in the Medicare Managed Care program or drug benefit program.

2. Cost report settlement process and Medical Education payments – The Recovery Auditor shall not attempt to identify underpayments and overpayments that result from Indirect Medical Education (IME) and Graduate Medical Education (GME) payments. The Recovery Auditor shall not review cost report settlements for overpayment/underpayment identification. Hospitals receiving Periodic Interim Payments (PIP) are not excluded from review.

3. Claims more than three (3) years past the date of the initial determination – The Recovery Auditor shall not attempt to identify any overpayment or underpayment more than three years past the date of the initial determination made on the claim. The initial determination date is defined as the claim paid date documented in the Common Working File (CWF). Any overpayment or underpayment inadvertently identified by the Recovery Auditor after this timeframe shall be set aside. The Recovery Auditor shall take no further action on these claims except to indicate the appropriate status code in the Data Warehouse. The look back period is conducted starting from the date of the initial determination and ending with the date the Recovery Auditor issues the medical record request letter (for complex reviews) or the date of the overpayment notification letter (for automated reviews). Adjustments that occur after the 3 year timeframe can be demanded and collected, however, the Recovery Auditor shall not receive a contingency fee payment.

4. Random selection of claims – The Recovery Auditor shall adhere to Section 935 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003, which prohibits the use of random claim selection for any purpose other than to establish an error rate. Therefore, the Recovery Auditor shall not use random review in order to identify cases for which it will order medical records from the provider. Instead, the Recovery Auditor shall utilize data analysis techniques in order to identify those claims most likely to contain overpayments. This process is called “targeted review”. The Recovery Auditor may not target a claim solely because it is a high dollar claim but may target a claim because it is high dollar AND contains other information that leads the Recovery Auditor to believe it is likely to contain an overpayment.

A Recovery Auditor may receive provider referrals from CMS or other CMS contracting entities, and may perform provider specific reviews on approved issues. Referrals received for issues that have not yet been approved by the new issue approval process for the Recovery Auditor within that region must still comply with new issue approval process prior to audit initiation.

The above paragraph does not preclude the Recovery Auditor from utilizing extrapolation techniques for targeted providers or services.

5. Claims identified with a Special Processing Number – Claims containing Special Processing Numbers are involved in a Medicare demonstration or have other special processing rules that apply. These claims are not subject to review by the Recovery Auditor. CMS attempts to remove these claims from the data prior to transmission to the Recovery Auditor.

The CMS reserves the right to limit the number of reviews or the time period available for review by Recovery Auditor, state, claim type, provider type, or any other reason where CMS believes it is in the best interest of the Medicare program to limit claim review. This notice will be in writing (includes e-mail) and will be effective immediately.

C. Underpayments The Recovery Auditor shall review claims using automated, or complex, review to identify potential Medicare underpayments. Upon identification, the Recovery Auditor will communicate the underpayment finding to the appropriate MAC. The Recovery Auditor shall not ask the provider to correct and resubmit the claim. The Recovery Auditor shall obtain approval of the underpayment notification letter language from the CMS COR before issuing the first letter.

For purposes of the Recovery Audit program, a Medicare underpayment is defined as lines or payment group (e.g. APC, RUG) on a claim that was billed at a low level of payment but should have been billed at a higher level of payment. The Recovery Auditor will review each claim line or payment group and consider all possible occurrences of an underpayment in that one line or payment group. If the medical documentation supports changes to the diagnosis, procedure, or order in that line or payment group that would create an underpayment, the Recovery Auditor shall identify an underpayment. Service lines or payment groups that a provider failed to include on a claim are NOT considered underpayments for the purposes of the program.

1. Examples of an Underpayment:

· The provider billed for 15 minutes of therapy when the medical record clearly indicates 30 minutes of therapy was provided. (Certain HCPCS/CPT codes are measured in 15 minute increments and are called “timed” codes. These services require direct (one-on-one) patient contact. When reporting a 15-minute service, the provider should enter “1” in the field labeled units on the claim form. The provider in this scenario is entitled to 2 units.)

· The provider billed for a particular service and the amount the provider was paid was lower than the amount on the CMS physician fee schedule.

· A diagnosis/condition was left off the MDS but appears in the medical record. Had this diagnosis or condition been listed on the MDS, a higher payment group would have been the result.

1. The following will NOT be considered an Underpayment:

· The medical record indicates that the provider performed additional services such as an EKG, but the provider did not bill for the service. (This provider type is paid based on a fee schedule that has a separate code and payment amount for EKG.)

· The provider billed for 15 minutes of therapy when the medical record clearly indicates 30 minutes of therapy was provided; however, the additional minutes do not affect the grouper or the pricier. (This provider type is paid based on a prospective payment system that does not pay more for this much additional therapy.)

· The medical record indicates that the provider implanted a particular device for which a device APC exists (and is separately payable over and above the service APC), but the provider did not bill for the device APC.

1. Provider Inquiries (Not Requested by Recovery Auditor) The Recovery Auditor does not have responsibility to randomly accept case files from providers for an underpayment case review. If the Recovery Auditor receives case files from providers that they did not request, the Recovery Auditor is under no obligation to respond to the provider, and may shred those records. Medical Record Requests The Recovery Auditor may request medical records for the sole purpose of identifying an underpayment. If required, the Recovery Auditor shall pay for all medical record requests, regardless of whether an underpayment or overpayment is determined.

1. Appeal of the Underpayment Determination The normal appeal process is available to providers for all underpayment determinations.

D. Obtaining, Storing, Sharing, and Paying for Medical Records

1. Obtaining medical records

Whenever needed for complex reviews, the Recovery Auditor may also obtain medical records by going onsite to the provider’s location to view/copy the records or by requesting that the provider mail/fax or securely transmit the records to the Recovery Auditor. (Securely transmit means sent in accordance with the CMS business systems security manual – e.g., mailed CD, MDCN line, through a clearinghouse, esMD transmittal.)

Before ADRs may be sent, the Recovery Auditor shall have the capability to receive medical records via esMD. In addition, the Recovery Auditor shall utilize the Internal esMD, also known as IesMD, if and when CMS makes it available to request and receive medical documentation from other Medicare review contractors.

The Recovery Auditor shall accept imaged medical records sent on CD, DVD, or electronically. Although providers are not mandated to electronically store or transmit medical records, The Recovery Auditor shall possess the technology to accept document via electronic transmission. The Recovery Auditor shall remain capable of accepting faxed or paper medical record indefinitely.

If the Recovery Auditor attempts an onsite visit and the provider refuses to allow access to their facility, the Recovery Auditor shall not make an overpayment determination based upon the lack of access. Instead, the Recovery Auditor shall request the needed records in writing. When onsite review results in an improper payment finding, the Recovery Auditor shall copy the relevant portions of the medical record and retain them for future use. When onsite review results in no finding of improper payment, the Recovery Auditor need not retain a copy of the medical record.

CMS will institute an Additional Documentation Request (ADR) limit. The ADR limit will be provider-, or provider type- specific. An example of an ADR limit would be no more than 2% of a hospital’s submitted Medicare claims in a 45-day period. The CMS will establish ADR limits that are diversified across all claim types of a facility (e.g. outpatient hospital, physicians, etc.). The ADR limit may take into account a provider’s annual Medicare payments.

CMS will establish a method to adjust the ADR limits based on a provider’s compliance with Medicare rules. This will result in providers with low denial rates having lower ADR limits, while providers with high denial rates will have higher ADR limits. Denial rates will be assessed by CMS on a regular basis. Adjustments to providers’ ADR limits shall only be made by CMS.

Current limits can be found in the Downloads Section of the CMS Recovery Audit Program website at the following URL: http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Recovery-Audit-Program/Program-Providers-Resources.html

The ADR limit may not be superseded by bunching the medical record requests. For example, if the medical record request limit for a particular provider is 50 per 45-day period and the Recovery Auditor does not request medical records in January and February, the Recovery Auditor cannot request 150 records in March.

The Recovery Auditor may deny claims where documentation is not submitted within 45 days (on day 46); however, the Recovery Auditor shall initiate at least one additional contact with a provider (through a letter, phone call, portal notification, or any other acceptable method) before denying the claim. The Recovery Auditor shall allow all providers at least one extension for the submission of additional documentation.

ADR limits will be incrementally applied, per CMS instruction, to new providers under review. This will ensure that a provider who has not received previous ADRs is able to respond to the request timely, with current staffing levels.

The CMS reserves the right to change the timeframe for which providers have to submit additional documentation.

All medical record request letters must adequately describe the good cause for reopening the claim. Good cause for reopening the claim may include but is not limited to OIG report findings, data analysis findings, comparative billing analysis, etc.

1. Storing and sharing medical records

The Recovery Auditor shall make available to CMS, the MACs, QICs, OIG, and others as indicated by the CMS COR any requested medical record. Records and case files can be transmitted via a secure line, secure CD, IesMD (when available), MPLS or another method prescribed by CMS.

1. Storing and sharing IMAGED medical records

The Recovery Auditor shall, on the effective date of this contract, be prepared to store and share imaged medical records. The Recovery Auditor shall:

· provide a document management system,

· have the capability to receive and transmit esMD transmissions to providers, CMS and other Medicare contractors,

· store medical record NOT associated with an overpayment for 1 year,

· store medical records associated with an overpayment for duration of the contract,

· maintain a log of all requests for medical records indicating at least the requester, a description of the medical record being requested, the date the request was received, and the date the request was fulfilled.

Upon the end of the contract, the Recovery Auditor shall send copies of the imaged records to the entity specified by the CMS COR.

1. Paying for Medical Records

The Recovery Auditor shall pay the provider for medical records in accordance with the current guidelines prescribed in the PIM, unless otherwise directed by the CMS COR. (The current per page rate is: medical records photocopying costs at a rate of $.12 per page for reproduction of PPS provider records and $.15 per page for reproduction of non-PPS institutions and practitioner records, plus first class postage.) The amount per page will not exceed these rates.