Recovery Audit Reform Bill Calls for Financial Penalties

James Carroll, for HealthLeaders Media , October 31, 2012

Annual limits
The bill includes a combined additional documentation request limit. It would establish annual limits that may not exceed 2% of all prepayment audit requests or complex postpayment audit requests in a year and 500 additional documentation requests during any 45-day period at a given facility.

This section of the bill would take effect on the date the act passes and would apply to claims submitted for payment under title XVIII of the Social Security Act for items or services furnished by providers of services or suppliers on or after January 1, 2013.

Physician validation of medical necessity denials
The last item in the legislation will likely be a popular one among providers. It would require a physician review each claim denial for medical necessity when the person who performed the review and issued the denial for a medical necessity is not a physician. In particular, a physician reviewing a claim would make a determination whether:

  • The denial of the claim under the medical necessity review by the non-physician employee is appropriate
  • Sign and certify such determination
  • Append such signed and certified determination to the claim file

This proposal that a physician validate medical necessity denials will apply to Recovery Auditors, Medicare administrative contractors, and the Comprehensive Error Rate Testing (CERT) contractors.


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1 comments on "Recovery Audit Reform Bill Calls for Financial Penalties"

Steve Levine (10/31/2012 at 11:37 AM)
Physicians are equally troubled as hospitals by the potential ravages of the RAC. Does this law provide protections to physicians, or only to hospitals?




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