CMS Awards Recovery Audit DME Contract


December 31, 2014

CONTACT: Kristin Walter
(202) 898-0995

CMS Awards Recovery Audit DME Contract
Spotlight on the area that accounts for highest percentage of the CERT error rate

Washington, D.C. – The Centers for Medicare and Medicaid Services (CMS) moved forward to award the first national recovery audit contract to identify Medicare improper payments among Durable Medical Equipment and Home Health and Hospice (DME/HH-H) claims. The contract was awarded to Connolly, LLC, a subsidiary of Connolly iHealth Technologies.

Within the scope of the proposed new recovery audit contracts, CMS determined they would select recovery auditors to review Medicare claims within four geographic regions of the country and add a new fifth nationwide region focused on identifying overpayments and underpayments specifically among DME/HH-H claims. According to the CMS FY2013 RAC Report to Congress, DME/HH-H claims account for the highest percentage of the CERT error rate, causing CMS to shine a light on these specific claims.

“Our coalition is pleased to see this important contract awarded, marking the beginning of the new Recovery Audit contracts. Medicare loses more money to waste than any other federal program, with an error rate of 12.7%. And, specifically, the DME/HH-H area has historically been riddled with billing errors,” said Kristin Walter, spokesperson for the American Coalition for Healthcare Claims Integrity (ACHCI). “The recovery audit program is essential to protecting Medicare’s future fiscal health by helping to balance the program’s checkbook – returning overpayments to the Trust Fund and underpayments back to providers. With the Medicare Trust Fund’s solvency in question due to a consistent loss of more than $50 billion per year, we’re pleased to see this first contract awarded, appropriate attention given to DME/HH-H claims and progress made to get auditors back to work protecting seniors’ long-term access to healthcare.”

The previous recovery audit contracts ended June 1, halting all Medicare oversight by the program. As an interim step, CMS allowed the previously contracted recovery auditors to restart on a limited basis while awaiting the award of the new contracts. The recovery audit contract for DME/HH-H is the first of the five new contracts to be awarded.

Congress mandated the creation of the recovery audit contractor program to review Medicare claims, identify billing errors and return misused funds to the Medicare Trust Fund. Since the program began in 2009, recovery auditors have returned more than $8.9 billion to the Trust Fund, while reviewing less than 2% of Medicare claims from any given provider. Recovery auditors have also returned more than $800 million in underpayments to providers. In FY 2013, an independent validation contractor found that recovery auditors had an average accuracy rate of 96.4%.

For more information, please visit: www.properpayments.com

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