November 19, 2015
The Centers for Medicare & Medicaid Services (“CMS”) announced that it has reduced the maximum percentage of records that providers must submit to Recovery Audit Contractors (“RAC”) through the payment auditing process.

What You Need to Know:
  • Beginning January 1, 2016, the annual limit for additional document requests (“ADR”) will be 0.5 percent of a provider’s total paid Medicare claims from the last year - a reduction from the current level of 2 percent of a provider’s total paid claims.
  • Providers should note that this update does not apply to physicians or suppliers. The update is also limited to the RAC program, and does not include Zone Program Integrity Contractors (ZPIC) or other audit contractors.
  • Providers will receive ADR letters from Medicare on a 45-day cycle. For each 45-day cycle, the total number of claims under the ADR limit will be divided by eight. This is the cycle limit, or the maximum number of claims that can be included in a single 45-day period. Auditors may not make requests more frequently than every 45 days.
  • ADR limits will be mixed between all claim types in a facility, based on the types of bill the provider was paid for in a previous year.
  • CMS also advised that lower denial rates and compliance with Medicare rules will allow providers to submit fewer records to Medicare to support claims being audited, while providers with higher denial rates will be required to submit more records.

The update comes at an interesting crossroads in the clash between the Department of Health and Human Services (“HHS”) and the American Hospital Association (“AHA”) over the “egregious backlog” of claims tied up in the administrative appeals process. On November 9, AHA argued that the D.C. Circuit should require HHS to fulfill its legal requirement to decide RAC appeals within 90 days after a request is filed. Counsel for the AHA stated that the current wait times extend to 780 days.