Prepayment Review of Claims

3.4 - Prepayment Review of Claims (Rev. 12772; Issued: 08-09-24; Effective: 09-20-24; Implementation: 09-20-24) This section applies to MACs and UPICs. A. General Non-random (targeted) review is defined as review conducted with a specific reason or logic to substantiate the cause for review. MACs are encouraged to initiate non-random service-specific prepayment review to prevent improper payments for services identified by CERT or Recovery Auditors or other sources. The MACs shall initiate targeted provider-specific prepayment review only when there is the likelihood of a sustained or high level of improper payments. B. 100 Percent Prepayment Review and Random Review Instructions Section 1302 of the Health Care and Education Reconciliation Act (HCERA) repealed section 1874A (h) of the Social Security Act which had placed restrictions on prepayment medical review. CMS review contractors shall comply with Section 1 random review and Section 2 100 percent prepayment review. 1. Random Review Random review is defined as review conducted without a specific reason or logic to substantiate the cause for review. MACs have the discretion to conduct random reviews of services; however, CMS does not recommend random reviews. MACs shall notify the CMS Contracting Officer’s Representative (COR), Regional Office Technical Monitor (TM), and Business Function Lead (BFL) of its intent to conduct random review. The MAC shall describe what the intended result of the random review will be, an estimate of the number of claims to be reviewed randomly and the rationale as to why random review would be more effective than targeted review. 2. 100 Percent Prepayment Review 100 percent prepayment review is defined as review of every claim submitted by a targeted provider for a specific code (i.e., DRG, CPT, HCPCs). 100 percent prepayment review also includes review of every claim submitted by the targeted provider. MACs have the discretion to conduct 100 percent prepayment review of providers. CMS considers 100 percent prepayment review to be appropriate when a provider has a prolonged time period of non-compliance with CMS policies. Any MAC that plans to conduct 100 percent prepayment review shall inform the CMS COR, Regional Office TM, and BFL in advance about any provider being placed on 100 percent prepayment review. In addition, the MAC shall provide • The background information on attempts to educate the provider. • The historical improper payment rate of the provider before beginning 100 percent prepayment review. • The length of time the provider is expected to be on 100 percent prepayment reviews. • The estimated number of claims and the dollar value of claims expected to be reviewed per month. • The criteria for removing the provider from 100 percent prepayment review. 3. UPIC Initiated Prepayment Reviews No UPIC shall initiate a 100 percent prepayment review without CMS approval. Therefore, the UPIC shall provide its COR and BFL a summary of the investigation, any prior history (if applicable) with the provider/supplier in question, and any other relevant information in a format agreed upon by the COR and BFL. If the COR and BFL agree that 100 percent prepayment review is appropriate, the UPIC shall include the case on the next case coordination meeting agenda for discussion and final approval. During the case coordination meeting, the UPIC may receive additional guidance from CMS related to subsequent actions related to these investigations. If the UPIC has subsequent questions following the case coordination meeting, the UPIC shall coordinate with its COR and BFL.