An Explanation of Medicare Medical Review Strategies

If you’ve worked in the hospice realm for any length of time, you may be familiar with Additional Development Requests (ADRs). An ADR is a request for medical documentation to ensure proper payment for provided Medicare services. Claims are selected based on specific parameters set by the Centers for Medicare and Medicaid Services (CMS).

ADRs have been around for years. In 2017, CMS introduced a new ADR strategy—Targeted Probe and Educate (TPE). TPE requests are designed to help hospice providers reduce and prevent improper payments, reduce appeals, decrease provider burden and improve the medical review and education process.

Many common errors, such as a missing physician’s signature, are easily corrected. Yet, when an agency is “targeted,” it must be addressed within the parameters of the TPE guidelines, or the agency could be subject to a host of unpleasant consequences.

To understand TPE better, it’s helpful to understand the context in which it was devised. Essentially, Medicare medical reviews are undertaken to accomplish four main goals: 

1. Identify and prevent inappropriate payments
2. Identify potential risks to the Medicare trust fund
3. Educate providers
4. Appropriately pay for covered services 

In this regard, the Medicare Fee for Service (FFS) Recovery Audit Program’s mission is to identify and correct improper Medicare payments through the efficient detection and collection of overpayments made on claims of health care services provided to Medicare beneficiaries, and the identification of underpayments to providers. This, in turn, allows CMS to implement actions that will prevent future improper payments in all 50 states. It is a required mandate through the Social Security Act.

Generally, these recovery programs fall into three main buckets:

Medical Review

Performed by: Medicare Administrative Contractors (MACs), Zone Program Integrity Contractors (ZPICs), Program Safeguard Contractors (PSCs), Supplemental Medical Review Contractors and outside contractors

• Claim review contractors identify suspected improper billing through error rates produced by the Comprehensive Error Rate Testing (CERT) program; vulnerabilities identified through the Recovery Audit Program; claim data analysis; and evaluation of other information (e.g., complaints). Generally, claim review contractors focus Medical Review (MR) activities on identified problem areas and select appropriate action for the severity of the problem.

Note: Medical reviews will generate ADRs.

Comprehensive Error Rate Testing (CERT)

Performed by: CERT Review Contractors (RCs) and CERT Statistical Contractors (SCs)

• CMS calculates the FFS improper payment rate through the Comprehensive Error Rate Testing (CERT) program. Each year, CERT evaluates a statistically valid stratified random sample of claims to determine if they were paid properly under Medicare coverage, coding and billing rules.
• The fiscal year (FY) 2017 Medicare FFS program improper payment rate was 9.51 percent, representing $36.21 billion in improper payments, compared to the FY 2016 improper payment rate of 11 percent, or $41.08 billion in improper payments.

Recovery Audit

Performed by: Medicare FFS recovery auditors

• Recovery auditors review past Medicare FFS claim data for potential overpayments or underpayments, reviewing medical records when necessary to make appropriate determinations. When performing these reviews, recovery auditors follow Medicare regulations, billing instructions, National Coverage Determinations (NCDs), coverage provisions and the respective MAC’s Local Coverage Determinations (LCDs).
• Recovery auditors do not develop or apply their own coverage, payment or billing policies.
• In general, recovery auditors do not review a claim previously reviewed by another entity. Rather, recovery auditors analyze claim data using their proprietary software to identify claims that clearly or likely contain improper payments.

Each of these recovery programs is designed with one common goal in mind—the recoupment of funds. Each is mandated by an act of Congress, and they are not going away anytime soon for providers of all scopes—including hospice agencies.

Enter TPE – the New ADR Strategy

CMS’s TPE program is designed to help providers and suppliers reduce claim denials and appeals through one-on-one help. In our next series of blogs, we’ll explain why TPE was developed, how it works and how it affects your hospice agency.

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