RACFacts: Did Probe & Educate Work?

Did Probe & Educate Work?

For the past year-and-a-half, there has been a moratorium in place preventing recovery auditors from reviewing claims for medically necessary hospital stays that span two midnights — known as the “Two-Midnight Rule.” The suspension was put in place in order to allow hospitals to better understand this new Medicare policy before facing audits, as these particular claims are very often billed improperly.

During this audit “oversight holiday,” Medicare Administrative Contractors (MACs) have been implementing the Probe & Educate initiative, reviewing prepayment claims to determine which hospitals understand the “Two Midnight Rule” and providing needed education to those hospitals that were not implementing the rule correctly.

With the moratorium set to expire on March 31, 2015, the question is: has the Probe & Educate initiative done its job?

Unfortunately, very little has been reported regarding the efficacy of the Probe & Educate initiative as a whole, however if the goal of the program was to educate providers to ultimately reduce Medicare improper billing, the program does not seem to have worked. According to a November presentation at the RAC Summit, some MACs reported identifying errors at rates ranging from 26%-71.2% in their jurisdictions – levels much higher than identified by CERT error rate review (12.7% for Medicare Fee-For-Service).

Waste in Medicare is now at the highest rate in history and according to a new report from the Government Accountability Office (GAO), the program now holds the title for the highest rate of financial waste government-wide, with an estimated $60 billion lost in FY2014 alone, of which $46 billion is specific to Medicare FFS. 

In fact, during the Probe & Educate period,

​● The rate of improper payments within Medicare FFS has climbed steadily upward – from 10.6% to an all-time high of 12.7%.

The audit moratorium in tandem with the CMS scale-back of other RAC reviews have caused recoveries of improper Medicare FFS payments to be at the lowest level in program history, with only $48.25 million recovered in Q1 FY2015 (see graph below).
Medicare is on the fast track to bankruptcy, but decision makers don’t seem to be taking notice. We ask Congress to end the “oversight holiday” and allow Recovery Auditors to get back to work at previous levels to extend the life of the Medicare Trust Fund.
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