December 3, 2009

BREAKING NEWS: CMS Announces Major Change in Additional Documentation Request (ADR) Limits for RACs

By

cservais120ds
(DECEMBER 2, 2009) - CMS has just modified the limits it set in October 2008 for the number of records that can be requested every 45 days. The announcement, posted today on the agency's Web site, suggests that in some situations the new system could result in more provider records being submitted to the RAC.

 

Rather than split out Inpatient claims and outpatient claims, the limit will be set on the total number of claims submitted in the prior calendar year by a "campus." A campus is defined as all the facilities/practices organized under one Tax ID Number (TIN) and with the same first 3 digits of a zip code.

 

Examples:

 

Provider A with TIN 123456789 has two locations: one in ZIP 12345 and one in ZIP 12346.  This is one campus.

 

Provider B with TIN 123456780 has two locations:  one in ZIP 12345 and one in ZIP 21345.  These are two campuses.

 

The limit per campus will be 1 percent of all claims of all types submitted by the "campus" for the previous calendar year divided into eight periods.  The claims total is irrespective of paid/denied status and/or individual lines, although interim/final and RAPs/Final claims will be considered as one claim.  A RAC may only request records once every 45 days.

 

In comparing how CMS's hypothetical providers would do under the new system versus the old system, the follow examples are offered:

 

Provider C billed 156,253 claims in 2008. 

 

New system:

 

The documentation limit would be (156253*.01)/8 = 195.31 or 195 requests/45 days

 

Old system:

 

Assuming these are outpatient claims (156253)/12)*.01 = 130.21 or 130 requests/45 days

 

Conclusion

 

New system could result in more records being submitted to the RAC.

 

Provider D billed 50,000 inpatient claims, 75,000 outpatient claims, 20,000 SNF covered stays, 20,000 home health episodes of care, 250,000 physician claims, 10,000 inpatient rehab claims and 1,000 hospice claims.


New system:

 

426,000 total claims.  (426,000*.01)/8 = 532.5. (However, there is a cap in place of 200 - 300 records depending on the date of the request (see below for explanation).

 

Old system:

 

Total Inpatient claims = (50,000 IP + 20,000SNF + 10,000 IRF + 1000 Hospice) or 81,000.

(81,000/12) = 6750*.10 = 675 inpatient claims with a cap of 200.

 

Total Part B claims = (75,000 OP + 20,000 Home Health) or 95,000.

(95,000/12) = 7917*.01 + 79 part B claims

 

Physician claims = Assuming this is a large group - the total number of records is limited to 50 records.

 

TOTAL is (200+79+50) or 329 records/45 days.

 

Conclusion - new system could result in fewer records being submitted to the RAC.

 

BUT, several other interesting parts to this new formula:

 

1.   The RAC may exercise discretion in the exact composition of the additional documentation request.  So for provider D, the 200 - 300 records in the cap could all be from the physician group or the outpatient area or the inpatient area or any combination of the three.

 

2.   CMS will allow the RACs to request permission to exceed the cap after the first six (6) months of the fiscal year.  Permission will be granted on a provider-by-provider basis.   If you appear to be a provider with claims issues, you could be targeted for additional documentation requests.  There does not appear to be any cap on these extensions and there is no indication as to how long the higher number of requests will last.

 

CAP Changes:  Two caps will exist in FY2010:

 

1.   Until April 1, 2010, the cap will remain at 200 additional documentation requests/45 days for all providers/suppliers.

 

2.   From April 1 until Oct 1, a campus that bills in excess of 100,000 total claims to Medicare will have a cap of 300 additional documentation requests/45 days.

 

 

What happens after Oct 1, 2010?

Stay tuned.

 

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Cheryl E. Servais, MPH, RHIA

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