Progressive Corrective Action (PCA)

3.7.1 - Progressive Corrective Action (PCA) (Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) This section applies to MACs. The MACs shall ensure that actions imposed upon Medicare providers or suppliers for failure to meet Medicare rules, regulations and other requirements are appropriate given the level of non-compliance. When an error has been validated through MR, the corrective action imposed by the MACs should match the severity of the error. PCA is a means of evaluating the relative risk of the error and assigning appropriate corrective actions. The principles of PCA are: • It is data-driven. Errors are validated by prepayment and postpayment claims review. (See below). • Hypotheses and edits are tested prior to implementation to determine facility, utility, and return on investment. • Workloads are targeted, specific, and prioritized. • Money is collected when errors are validated. • Referrals for potential fraud are made when necessary. • Provider feedback and education are mandatory. • Medical review resources should be used efficiently. For each provider data identifies as being at risk, the potential error is validated with prepayment or postpayment review of generally 20-40 potentially erroneous claims. Payments are either denied or recouped. Any underpayments by Medicare will be netted out during the financial reconciliation process. Corrective actions are then implemented based on whether the error represents a minor, moderate, or major concern. For potentially risky services, errors are validated by prepayment and postpayment review of generally up to 100 potential problem claims for that service from a representative sample of providers. Service-specific errors may require more widespread education for providers and may require the implementation of service-specific prepayment edits. An example of a minor concern would be a provider with a low error rate and no pattern of errors who has made a relatively minor error with low financial impact. Education and collection of the overpayment may be sufficient corrective actions. For moderate concerns, where a provider with a low error rate has made an error with substantial financial impact, some level of prepayment review should be considered. The prepayment review should be tracked and adjusted or eliminated according to the provider’s response. A major concern would be a provider with a high error rate who has made a high-dollar error with no mitigating circumstances, indicating the need for stringent administrative action. A high level prepayment review should be considered along with possible payment suspension and referral to the UPICs.