Medicare Program Integrity Manual 
Chapter 3 - Verifying Potential Errors and Taking 
Corrective Actions 
 
Table of Contents 
 (Rev. 12056; Issued: 05-25-23) 
 
 
 
Transmittals for Chapter 3 
 
3.1 - Introduction 
3.2 - Overview of Prepayment and Postpayment Reviews 
3.2.1 - Setting Priorities and Targeting Reviews 
3.2.2 - Provider Notice 
3.2.2.1 - Maintaining Provider Information 
3.2.3 - Requesting Additional Documentation During Prepayment and 
Postpayment Review 
3.2.3.1 - Additional Documentation Requests (ADR). 
3.2.3.2 - Time Frames for Submission 
3.2.3.3 - Third-Party Additional Documentation Request 
3.2.3.4 - Additional Documentation Request Required and Optional 
Elements 
3.2.3.5 - Acceptable Submission Methods for Responses to ADRs 
3.2.3.6 - Reimbursing Providers and HIHs for Additional Documentation 
3.2.3.7 - Special Provisions for Lab Additional Documentation Requests 
3.2.3.8 - No Response or Insufficient Response to Additional 
Documentation Requests 
3.2.3.9 - Reopening Claims with Additional Information or Denied Due to 
Late or No Submission of Requested Information 
3.2.3.10 - Record Retention and Storage 
3.2.4 - Use of Claims History Information in Claim Payment Determinations 
3.2.5 - Targeted Probe and Educate (TPE) 
3.3 - Policies and Guidelines Applied During Review 
3.3.1 - Types of Review: Medical Record Review, Non-Medical Record Review 
and Automated Review 
   3.3.1.1 - Medical Record Review 
3.3.1.2 - Non-Medical Record Review  
3.3.1.3  Automated Reviews   3.3.2 - Medical Review Guidance 
3.3.2.1 - Documents on Which to Base a Determination 
3.3.2.1.1 - Progress Notes and Templates 
3.3.2.1.2 DMEPOS Orders 
3.3.2.2 - Absolute Words and Prerequisite Therapies 
3.3.2.3 - Mandatory Policy Provisions 
3.3.2.4 - Signature Requirements 
3.3.2.5  Amendments, Corrections and Delayed Entries in Medical 
Documentation 
3.3.2.6 - Psychotherapy Notes 
3.3.2.7 - Review Guidelines for Therapy Services 
3.3.2.8 - MAC Articles 
3.3.3 - Reviewing Claims in the Absence of Policies and Guidelines 
3.4 - Prepayment Review of Claims 
3.4.1 - Electronic and Paper Claims 
3.4.1.1 - Linking LCD and NCD ID Numbers to Edits 
3.4.1.2 - Not Otherwise Classified (NOC) Codes 
3.4.1.3 - Diagnosis Code Requirements 
3.4.1.4 - Prepayment Review of Claims Involving Utilization Parameters 
3.4.1.5 - Prepayment Review Edits 
3.4.2 - Prepayment Medical Record Review  Edits 
3.5 - Postpayment Medical Record Review of Claims 
3.5.1 - Re-opening Claims 
3.5.2 - Case Selection 
3.5.3 - CMS Mandated Edits 
3.5.4 - Tracking Medicare Contractors Prepayment and Postpayment Reviews 
3.6 - Determinations Made During Review 
3.6.1 - Determining Overpayments and Underpayments 
3.6.2 - Verifying Errors 
3.6.2.1 - Coverage Determinations 
3.6.2.2 - Reasonable and Necessary Criteria 
3.6.2.3 - Limitation of Liability Determinations 
3.6.2.4 - Coding Determinations 
3.6.2.5 - Denial Types 
3.6.3 - Beneficiary Notification 
3.6.4 - Notifying the Provider 
3.6.5 - Provider Financial Rebuttal of Findings 
3.6.6 - Review Determination Documentation Requirements  3.7 - Corrective Actions 
3.7.1 - Progressive Corrective Action (PCA) 
3.7.1.1 - Provider Error Rate 
3.7.1.2 - Vignettes 
3.7.1.3 - Provider Notification and Feedback 
3.7.2 - Comparative Billing Reports (CBRs) 
3.7.3 - Evaluating the Effectiveness of Corrective Actions 
3.7.3.1 - Evaluation of Prepayment Edits 
3.7.3.2 - Evaluating Effectiveness of Established Automated Edits 
3.7.3.3 - Evaluation of Postpayment Review Effectiveness 
3.7.4 - Tracking Appeals 
3.7.5 - Corrective Action Reporting Requirements 
3.8 - Administrative Relief from MR During a Disaster 
3.9 - Defending Medical Review Decisions at Administrative Law Judge (ALJ) Hearings 
3.9.1  Election of Status 
3.9.2 - Coordination of the ALJ Hearing 
3.10  Prior Authorization 
3.10.1 -  Prior Authorization Program for Certain DMEPOS 
3.10.1.1 Voluntary Prior Authorization (PA) for DMEPOS Accessories 
3.10.2 - Prior Authorization Process for Certain Hospital Outpatient Department   
(OPD) Services 
  3.1  Introduction 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
All references to Medicare Administrative Contractors (MACs) include Affiliated 
Contractors (ACs). Affiliated Contractors are FIs and Carriers. 
 
A.  Goals 
 
This section applies to Medicare Administrative Contractors (MACs), Comprehensive 
Error Rate Testing (CERT), and Recovery Auditors, as indicated. 
 
The Medicare Administrative Contractors (MACs) shall analyze claims to determine 
provider compliance with Medicare coverage, coding, and billing rules and take 
appropriate corrective action when providers are found to be non-compliant. The goal of 
MAC administrative actions is to correct the behavior in need of change and prevent 
future inappropriate billing. The priority for MACs is to minimize potential future losses 
to the Medicare Trust Funds through targeted claims review while using resources 
efficiently and treating providers and beneficiaries fairly. 
 
For repeated infractions, MACs have the discretion to initiate progressively more severe 
administrative action, commensurate with the seriousness of the identified problem. 
(Refer to PIM chapter 3, 3.7.1). MACs shall deal with serious problems using the most 
substantial administrative actions available, such as 100 percent prepayment review of 
claims. Minor or isolated inappropriate billing shall be remediated through provider 
notification or feedback with reevaluation after notification. When medical review (MR) 
notification and feedback letters are issued, the MAC MR staff shall ensure that Provider 
Outreach and Education (POE) staff has access to copies of the letters in case a provider 
requests further education or POE determines that future education is needed. While 
program savings are realized through denials of payment for inappropriate provider 
billing, the optimal result occurs when compliance is achieved and providers no longer 
incorrectly code or bill for non-covered services. 
 
The Medicare Fee For Service Recovery Audit program is a legislatively mandated 
program (Tax Relief and Health Care Act of 2006) that utilizes Recovery Auditors to 
identify improper payments paid by Medicare to fee-for-service providers. The Recovery 
Auditors identify the improper payments, and the MACs adjust the claims, recoup 
identified overpayments and return underpayments. 
 
MAC, CERT and Recovery Auditor staff shall not expend Medicare Integrity Program 
(MIP)/ MR resources analyzing provider compliance with Medicare rules that do not 
affect Medicare payment. Examples of such rules include violations of conditions of 
participation (COPs), or coverage or coding errors that do not change the Medicare 
payment amount. 
 
The COPs define specific quality standards that providers shall meet to participate in the 
Medicare program. A providers compliance with the COPs is determined by the CMS  Regional Office (RO) based on the State survey agency recommendation. If during a 
review, any contractor believes that a provider does not comply with conditions of 
participation, the reviewer shall not deny payment solely for this reason. Instead, the 
contractor shall notify the RO and the applicable State survey agency. 
 
When a potential underpayment or overpayment is identified, certain steps are normally 
followed to determine if a payment error exists. These steps are referred to as the claims 
development process. The reviewer generally does the following: 
 
  Investigates the claims and associated documentation; 
  Performs appropriate research regarding liability, benefit 
categories, statutory requirements, etc.; 
  Determines if a payment error exists and the nature of the error; 
  Notifies the beneficiary and provider/supplier; and 
  Starts the payment reconciliation process. 
 
B.  New Provider/New Benefit Monitoring 
 
This section applies to the MACs. 
 
The MACs shall analyze data to identify patterns of billing aberrancies of providers new 
to the Medicare program. The MACs have the option of performing prepayment or 
postpayment review of claims submitted by new providers as needed. The CMS 
encourages the MACs to perform these reviews on a prepayment basis to have the 
greatest chance of identifying and reducing the error rate of new providers. When MACs 
review the claims of a new provider, the MACs shall perform a limited review of 
generally 20-40 claims in order to evaluate accurate billing. 
 
The MACs shall also monitor for provider use of new statutory benefits and to ensure 
correct coverage, coding, and billing from the beginning. New benefit edits shall continue 
until the MAC is satisfied that the new benefits are being used and billed appropriately or 
until the MAC determines that resources would best be spent on other types of review. 
 
3.2  Overview of Prepayment and Postpayment Reviews 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a 
beneficiary's Medicare identification number. For purposes of this manual, Medicare 
beneficiary identifier references both the Health Insurance Claim Number (HICN) and 
the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition 
period and after for certain business areas that will continue to use the HICN as part of 
their processes. 
 
This section applies to MACs, CERT, RACs, SMRCs, and Unified Program Integrity 
Contractors (UPICs), as indicated. 
  A.  Prepayment and Postpayment Review 
 
Prepayment review occurs when a reviewer makes a claim determination before claim 
payment has been made. Prepayment review always results in an initial determination. 
Postpayment review occurs when a reviewer makes a claim determination after the claim 
has been paid. Postpayment review results in either no change to the initial determination 
or a revised determination indicating that an overpayment or underpayment has 
occurred. 
 
B.  Prepayment Edit Capabilities 
 
Prepayment edits shall be able to key on a beneficiary's Medicare beneficiary identifier 
(Mbi), National Provider Identifier (NPI) and specialty code, service dates, and diagnosis 
or procedure code(s) (i.e., Healthcare Common Procedure Coding System [HCPCS] 
and/or International Classification of Diseases diagnoses codes), Type of Bill (TOB), 
revenue codes, occurrence codes, condition codes, and value codes. 
 
The MAC systems shall be able to select claims for prepayment review using different 
types of comparisons. At a minimum, those comparisons shall include: 
 
  Procedure to Procedure -permits contractor systems to screen 
multiple services at the claim level and in history. 
 
  Procedure to Provider - permits selective screening of services that 
need review for a given provider. 
 
  Frequency to Time- permits contractors to screen for a certain 
number of services provided within a given time period. 
 
  Diagnosis to Procedure- permits contractors to screen for services 
submitted with a specific diagnosis. For example, the need for a 
vitamin B12 injection is related to pernicious anemia, absent of the 
stomach, or distal ileum. Contractors must be able to establish edits 
where specific diagnosis/procedure relationships are considered in 
order to qualify the claim for payment. 
 
  Procedure to Specialty Code or TOB- permits contractors to screen 
services provided by a certain specialty or TOB. 
 
  Procedure to Place of Service- permits selective screening of 
claims where the service was provided in a certain setting such as a 
comprehensive outpatient rehabilitation facility. 
 
Additional MAC system comparisons shall include, but are not limited to the following: 
 
  Diagnoses alone or in combination with related factors.   
  Revenue linked to the health care common procedure coding 
system (HCPCS). 
 
  Charges related to utilization, especially when the service or 
procedure has an established dollar or number limit. 
 
  Length of stay or number of visits, especially when the service or 
procedure violates time or number limits. 
 
  Specific providers alone or in combination with other parameters. 
 
The MR edits are coded system logic that either automatically pays all or part of a claim, 
automatically denies all or part of a claim, or suspends all or part of a claim so that a 
trained clinician or claims analyst can review the claim and associated documentation 
(including documentation requested after the claim is submitted) in order to make 
determinations about coverage and payment under Section 1862(a) (1) (A) of the Act.  
 
Namely, the claim is for a service or device that is medically reasonable and necessary to 
diagnose or treat an injury or improve the functioning of a malformed body member. All 
non-automated review work resulting from MR edits shall: 
 
  Involve activities defined under the MIP at 1893(b)(1) of the Act; 
 
  Be articulated in the MACs medical review strategy; 
 
  Be designed in such a way as to reduce the MACs CERT error 
rate or prevent the MACs CERT error rate from increasing, or; 
 
Prevent improper payments identified by the RACs. 
 
3.2.1  Setting Priorities and Targeting Reviews 
(Rev. 399, Issued: 11-04-11, Effective: 12-05-11, Implementation: 12-05-11) 
 
This section applies to MACs and Recovery Auditors, as indicated. Recovery Auditors 
perform targeted reviews consistent with their statements of work (SOWs).  
 
The MACs have the authority to review any claim at any time, however, the claims 
volume of the Medicare Program doesnt allow for review of every claim. The MACs 
shall target their efforts at error prevention to those services and items that pose the 
greatest financial risk to the Medicare program and that represent the best investment of 
resources. This requires establishing a priority setting process to assure MR focuses on 
areas with the greatest potential for improper payment. 
 
The MACs shall develop a problem-focused, outcome-based MR strategy and Strategy 
Analysis Report (SAR) that defines what risks to the Medicare trust fund the MACs MR  programs will address and the interventions that will be implemented during the 
fiscal/option year as addressed in PIM chapter 7. 
 
The MACs shall focus their edits where the services billed have significant potential to be 
non-covered or incorrectly coded. Medical review staff may decide to focus review on 
problem areas that demonstrate significant risk to the Medicare program as a result of 
inappropriate billing or improper payments. The MACs shall have in place a program of 
systematic and ongoing analysis of claims and data from Recovery Auditors and CERT, 
among other sources, in order to focus intervention efforts on the most significant errors.  
 
The MACs shall initiate a targeted provider-specific prepayment review only when there 
is the likelihood of sustained or high level of payment error. MACs are encouraged to 
initiate targeted service-specific prepayment review to prevent improper payments for 
services identified by CERT or Recovery Auditors as problem areas, as well as, problem 
areas identified by their own data analysis.  
 
The MACs have the discretion to select target areas because of: 
 
  High volume of services;  
  High cost;  
  Dramatic change in frequency of use;  
  High risk problem-prone areas; and/or,  
  Recovery Auditor, CERT, Office of Inspector General (OIG) or Government 
Accounting Office (GAO) data demonstrating vulnerability. Probe reviews are not 
required when targeted areas are based on data from these entities.  
 
In an effort to identify the claims most likely to contain improper billing, MACs are 
encouraged to use prepayment and postpayment screening tools or natural language 
coding software. MACs shall not deny a payment for a service simply because the claim 
fails a single screening tool criterion. Instead, the reviewer shall make an individual 
determination on each claim. MACs have the discretion to post the screening tools in use 
to their Web site or otherwise disclose to the provider community. Recovery Auditors 
shall use screening tools and disclose their use to the provider community consistent with 
the requirements in their statements of work (SOWs). 
 
MACs and Recovery Auditors shall NOT target a provider for review solely based on the 
providers preferred method of maintaining or submitting documentation.  For example, a 
MAC or Recovery Auditor shall NOT choose a provider for review based only on the 
fact that the provider uses an electronic health record or responds to documentation 
requests using the Electronic Submission of Medical Documentation (esMD) mechanism.  
(More information about esMD can be found in Section (3.2.3.5) 
 
3.2.2 - Provider Notice 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-
27-20) 
  This section applies to MACs, RACs, UPICs, and SMRC as indicated. 
 
Because the CERT contractors select claims on a random basis, they are not required to 
notify providers of their intention to begin a review. 
 
Providers may submit unsolicited documentation to the MAC when submitting a claim. 
Providers are to list the PWK 02 Report Transmission Code (PWK (paperwork) modifier) 
on the claim when submitting this documentation. MACs should inform the providers 
that they are NOT required to submit unsolicited documentation (and the corresponding 
PWK modifier) and that the absence or presence of PWK modifier does not mean that 
their claim will be reviewed. MACs should, at their discretion, consider posting to their 
website or sending letters to providers informing them of what additional documentation 
is needed to make a determination on the claim. 
 
A.  Notice of Provider-Specific Review 
 
When MAC data analysis indicates that a provider-specific potential error exists that 
cannot be confirmed without requesting and reviewing documentation associated with the 
claim, the MAC shall review a sample of representative claims. Before deploying 
significant medical review resources to examine claims identified as potential problems 
through data analysis, MACs shall take the interim step of selecting a small "probe" 
sample of generally 20-40 potential problem claims (prepayment or postpayment) to 
validate the hypothesis that such claims are being billed in error. This ensures that 
medical review activities are targeted at identified problem areas.  The MACs shall 
ensure that such a sample is large enough to provide confidence in the result, but small 
enough to limit administrative burden. The CMS encourages the MACs to conduct error 
validation reviews on a prepayment basis in order to help prevent improper payments. 
 
MACs shall select providers for error validation reviews in the following instances, at a 
minimum: 
 
  The MAC has identified questionable billing practices (e.g., non-
covered, incorrectly coded or incorrectly billed services) through 
data analysis; 
 
  The MAC receives alerts from other MACs, Quality Improvement 
Organizations (QIOs), CERT, RACs, OIG/GAO, or 
internal/external components that warrant review; 
 
  The MAC receives complaints; or, 
 
  The MAC validates the items bulleted in 3.2.1. 
 
Provider-specific error validation reviews are undertaken when one or a relatively small 
number of providers seem to be experiencing similar/recurrent problems with billing. The 
MACs shall document their reasons for selecting the provider for the error validation  review. In all cases, they shall clearly document the issues noted and cite the applicable 
law, published national coverage determination, or local coverage determination. 
 
For provider-specific problems, the MAC shall notify providers in writing that a probe 
sample review is being conducted. MACs shall consider sending letters to providers 
informing them of what additional documentation is needed to make a determination on 
the claim. MACs have the discretion to use a letter similar to the letters in Exhibit 7 of 
the PIM when notifying providers of the probe review and requesting documentation. 
MACs have the discretion to advise providers of the probe sample at the same time that 
medical documentation or other documentation is requested. 
 
Generally, MACs shall subject a provider to no more than one probe review at any time; 
however, MACs have the discretion to conduct multiple probes for very large billers as 
long as they will not constitute undue administrative burden. 
 
MACs 
 
The MACs shall notify selected providers prior to beginning a provider-specific review 
by sending an individual written notice. MACs shall indicate whether the review will 
occur on a prepayment or postpayment basis. This notification may be issued via certified 
letter with return receipt requested. MACs shall notify providers of the specific reason for 
selection. If the basis for selection is comparative data, MACs shall provide the data on 
how the provider varies significantly from other providers in the same specialty, 
jurisdiction, or locality. Graphic presentations help to communicate the perceived 
problem more clearly. 
 
RACs 
 
The RACs are required to post a description of all approved new issues to the RACs 
Web site before correspondence is sent to the provider. After posting, the RAC should 
issue an additional documentation request (ADR) to the provider, if warranted. 
 
Unified Program Integrity Contractor (UPIC) 
 
The UPICs shall notify selected providers prior to beginning a provider-specific review 
by sending an individual written notice. UPICs shall indicate whether the review will 
occur on a prepayment or postpayment basis. UPICs shall maintain a copy of the letter 
and the date it was mailed. This notification shall be mailed the same day that the edit 
request is forwarded to the MAC. Refer to Exhibit 45 for the letter to be sent. 
 
B.  Notice of Service-Specific Review 
 
This section applies to MACs, RACs and SMRC as indicated. 
 
Service-specific reviews are undertaken when the same or similar problematic process is 
noted to be widespread and affecting one type of service (e.g., providing tube feedings to  home health beneficiaries across three (3) states). 
 
MACs 
 
Web site postings 
 
The MACs shall provide notification prior to beginning a service-specific review by 
posting a review description on their Web site. MACs should, at their discretion, state 
what additional documentation is needed from providers to make a claim determination 
on their Web site. MACs shall keep the Web site current by posting active reviews. 
 
MACs should, at their discretion, create an archive for old review topics that are no 
longer under active review. Active review is defined as the time period during which 
ADRs are sent, determinations are made and findings are communicated to the providers. 
MACs should categorize the active review topics by provider type. 
 
Individual written notices 
 
MACs have the discretion to also notify providers about a service-specific review by 
sending individual notices to the affected providers. MACs have the discretion to issue 
the notice separately or include it in the ADR. MACs should, at their discretion, state 
what additional documentation is needed from providers to make a claim determination 
in the written notices. 
 
RACs 
 
Before beginning widespread service-specific reviews, RACs shall notify the provider 
community that the RAC intends to initiate review of certain items/services through a 
posting on the RAC Web site describing the item/service that will be reviewed. 
 
Additionally, for medical record reviews, the RACs shall send ADRs to providers that 
clearly articulate the items or services under review and indicate the appropriate 
documentation to be submitted. 
 
Unified Program Integrity Contractors (UPICs) 
 
The UPICs shall provide notification prior to beginning a service-specific review by 
sending individual written notices to the affected providers. This notification shall be 
mailed the same day that the edit request is forwarded to the MAC. The UPICs shall 
maintain a copy of the letter and the date it was mailed. Refer to Exhibit 45 for the letter 
to be sent. 
 
SMRC 
 
The SMRC shall operate/maintain a public Web site that displays what types of issues are 
under review. For each area, the SMRC shall include a link to the relevant OIG/GAO or  other reports available. In addition to the Web site, the SMRC shall notify providers 
about a service-specific review by sending an ADR. The SMRC shall state what 
additional documentation is needed from providers to make a claim determination in the 
ADR. 
 
3.2.2.1 - Maintaining Provider Information 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-
27-20) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a 
beneficiary's Medicare identification number. For purposes of this manual, Medicare 
beneficiary identifier references both the Health Insurance Claim Number (HICN) and 
the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition 
period and after for certain business areas that will continue to use the HICN as part of 
their processes. 
 
This section applies to MAC. 
 
A.  Provider Tracking System (PTS) 
 
The MACs shall have a PTS in place to identify and track all individual providers 
currently under action plans to correct identified problems, such, as not reasonable and 
necessary, incorrect coding, and inappropriate billing. MACs shall use the provider 
tracking system (PTS) to coordinate contacts with providers such as MR notifications, 
telephone calls directly related to probe reviews, and referrals to POE. The MACs shall 
ensure that if a provider is to be contacted as a result of more than one problem, 
redundant contacts are minimized. The MACs shall also coordinate corrective action 
information with the UPICs to ensure contacts are not in conflict with benefit integrity 
related activities. The MAC PTS shall contain the date a provider is put on a provider- 
specific edit. The MAC shall reassess all providers on provider-specific prepayment or 
postpayment review on a quarterly basis to determine whether the behavior has 
improved. The MAC shall note the results of these quarterly assessments in the PTS. If 
the behavior has improved sufficiently and the edit was turned off, note that date as well 
in the PTS. When a MAC becomes aware that the provider has appealed a medical 
review determination to an Administrative Law Judge (ALJ), the MAC should send a 
letter to the ALJ and describe the information in the PTS to demonstrate the corrective 
actions that have been taken by the MAC. 
 
B.  Recovery Auditor Case Files 
The Recovery Auditor shall maintain case files following the guidelines in the Recovery 
Auditor SOW. 
 
C.  Provider Addresses 
 
This section applies to MACs, CERT, and Recovery Auditors, as indicated. 
  The MACs, CERT and Recovery Auditors shall mail the ADR to the best known address 
for the provider. MACs are encouraged to indicate the procedure a provider can follow to 
update address information in their ADRs and on their Web sites. If a provider wishes to 
have ADRs sent to one address but demand letters sent to a different address, MACs are 
encouraged to accommodate this request. 
 
Note: Providers and suppliers must complete and submit a Medicare enrollment 
application (either the paper CMS-855 or a submission via Internet-based Provider 
Enrollment, Chain & Ownership [PECOS] to change existing information in the 
Medicare enrollment record.) 
 
D.  When the Provider or Supplier No Longer Occupies a Physical 
Address 
 
This section applies to MACs and UPICs, as indicated. 
 
When the MACs and UPICs become aware that the provider or supplier no longer 
occupies a physical address, any future correspondence shall reference only the claim 
control numbers and not list the individual beneficiary data (e.g., names and Medicare 
beneficiary identifiers). This process is contingent on current automated system limits. 
 
The following are situations where the MAC and UPIC can assume the provider or 
supplier no longer occupies the last known location. This list is not exhaustive and the 
MACs and UPICs should use other means to confirm addresses, at their discretion. 
 
  The MAC and UPIC receive mail that has been returned by the 
post office indicating no known address; 
 
  An onsite visit has confirmed the address is vacant or is occupied 
by another occupant; or, 
 
  A beneficiary complaint(s) is on record stating the provider or 
supplier is no longer at the address and follow up confirms the 
complaint. 
 
In the above situations, correspondence from the MACs and UPICs shall only contain the 
claim control number and advise the provider or supplier to contact them for a list of the 
specific claims associated with the overpayment. This process will prevent the potential 
compromise of Medicare beneficiary names and/or Medicare beneficiary identifiers being 
sent to an abandoned address (or a location with a new occupant). If the letter is returned 
from the post office, maintain the notification on file for evidence. 
 
3.2.3 - Requesting Additional Documentation During Prepayment and 
Postpayment Review 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
  This section applies to MACs, CERT, RACs, and UPICs, as indicated. 
 
A.  General 
 
In certain circumstances, the MACs, CERT, RACs, and UPICs may not be able to make a 
determination on a claim they have chosen for review based upon the information on the 
claim, its attachments, or the billing history found in claims processing system (if 
applicable) or the Common Working File (CWF). In those instances, the reviewer shall 
solicit documentation from the provider or supplier by issuing an additional 
documentation request (ADR). The term ADR refers to all documentation requests 
associated with prepayment review and postpayment review. MACs, CERT, RACs, and 
UPICs have the discretion to collect documentation related to the beneficiarys condition 
before and after a service in order to get a more complete picture of the beneficiarys 
clinical condition. The MAC, RAC, and UPIC shall not deny other claims submitted 
before or after the claim in question unless appropriate consideration is given to the 
actual additional claims and associated documentation. The CERT contractor shall solicit 
documentation in those circumstances in accordance with its Statement of Work (SOW). 
 
The term additional documentation refers to medical documentation and other 
documents such as supplier/lab/ambulance notes and includes: 
 
  Clinical evaluations, physician evaluations, consultations, progress 
notes, physicians office records, hospital records, nursing home 
records, home health agency records, records from other healthcare 
professionals and test reports. This documentation is maintained by 
the physician and/or provider. 
 
  Supplier/lab/ambulance notes include all documents that are 
submitted by suppliers, labs, and ambulance companies in support of 
the claim (e.g., Certificates of Medical Necessity, supplier records of 
a home assessment for a power wheelchair). 
 
  Other documents include any records needed from a biller in order 
to conduct a review and reach a conclusion about the claim. 
 
NOTE: Reviewers shall consider documentation in accordance with other sections of this 
manual. 
 
The MAC and UPIC have the discretion to deny other related claims submitted before 
or after the claim in question, subject to CMS approval as described below. If 
documentation associated with one claim can be used to validate another claim, those 
claims may be considered related. Approved examples of related claims that may be 
denied as related are in the following situations: 
 
  When the Part A Inpatient surgical claim is denied as not reasonable 
and necessary, the MAC may recoup the surgeon's Part B services.  For services where the patients history and physical (H&P), 
physician progress notes or other hospital record documentation 
does not support the medical necessity for performing the procedure, 
postpayment recoupment may occur for the performing physicians 
Part B service. 
 
  Reserved for future approved related claim review situations. The 
MAC shall report to their BFL and COR prior to initiating denial of 
related claims situations. 
 
The MAC and UPIC shall await CMS approval prior to initiating requested related 
claim(s) review. Upon CMS approval, the MAC shall post the intent to conduct related 
claim review(s) to their Web site within 1 month prior to initiation of the approved 
related claim review(s). The MAC shall inform CMS of the implementation date of the 
related claim(s) review 1 month prior to the implementation date. 
 
If related claims are denied automatically, MACs shall count these denials as 
automated review. If the related claims are denied after manual intervention, MACs 
shall count these denials as non-medical record review. 
 
The RAC shall utilize the review approval process as outlined in their SOW when 
performing reviews of related claims. 
 
The MAC, RAC, and UPIC are not required to request additional documentation for the 
related claims before issuing a denial for the related claims. 
 
Contactors shall process appeals of the related claim(s) separately. 
 
B.  Authority to Collect Medical Documentation 
 
Contractors are authorized to collect medical documentation by the Social Security Act. 
Section 1833(e) states No payment shall be made to any provider of services or other 
person under this part unless there has been furnished such information as may be 
necessary in order to determine the amounts due such provider or other person under this 
part for the period with respect to which the amounts are being paid or for any prior 
period. Section 1815(a) states ...no such payments shall be made to any provider 
unless it has furnished such information as the Secretary may request in order to 
determine the amounts due such provider under this part for the period with respect to 
which the amounts are being paid or any prior period. 
 
The OMB Paperwork Reduction Act collection number for prepayment medical review is 
0938-0969. MACs shall use this number on every additional documentation request or 
any other type of written request for additional documentation for prepayment medical 
review. It can be in the header, footer or body of the document. CMS suggests the 
information read OMB #: 0938-0969 or OMB Control #: 0938-0969. Postpayment 
medical review does not require an OMB control number.   
C.  PWK (Paperwork) Modifier 
 
MAC medical review departments are only required to review unsolicited documentation 
when the claim suspends for a medical review edit/audit. MACs shall not send an ADR 
request for a claim with a PWK modifier until after review of the PWK unsolicited 
documentation or the waiting days have elapsed without receipt of documentation. 
 
MACs shall allow 7 calendar waiting days (from the date of receipt of the claim) for 
additional unsolicited documentation to be submitted or 10 calendar waiting days for 
the unsolicited documentation to be mailed. Contractors serving island territories shall 
have the flexibility to adjust waiting days as is necessary. CMS expects that any 
adjustment from the core 7/10 days will be discussed with and approved by your 
contracting officer prior to implementation. When the documentation is received, the 
contractor has 30 calendar days to make a determination on the claim. If the contractor 
cannot make a determination on the claim after reviewing the unsolicited documentation 
submitted, they shall request additional documentation using their normal business 
procedures for ADR that are outlined in Chapter 3 of the Program Integrity Manual. 
 
3.2.3.1 - Additional Documentation Requests (ADR) 
(Rev.933; Issued: 01-10-20; Effective: 02- 03- 20; Implementation: 01-06- 20) 
 
This section applies to MACs, Recovery Auditors, CERT and UPICs, as indicated. 
 
The MACs, CERT, Recovery Auditors, and UPICs shall specify in the ADR only those 
individual pieces of documentation needed to make a determination. When reviewing 
documentation, the reviewer shall give appropriate consideration to all documentation 
that is provided in accordance with other sections of this manual. 
 
The MACs and the RACs shall also support soliciting documentation from the provider 
or supplier via Electronic Submission of Medical Documentation (esMD). The 
contractors shall send an Electronic Medical Documentation Request (eMDR) via esMD 
to those providers/suppliers that have registered to receive the request electronically. The 
contractors are encouraged to explore other ways to send eMDRs electronically (For 
example, using direct exchange, clearinghouses, state Health Information Exchange 
(HIEs)). 
 
Providers interested in submitting documentation via esMD can find information on the 
CMS esMD website at http://www.cms.gov/esMD. 
 
 
A.  Outcome Assessment Information Set (OASIS) 
 
Medicares Home Health PPS Rate Update for CY 2010 final rule, published in the 
November 10, 2009 Federal Register, includes a provision to require the submission of 
the OASIS as a condition of payment, that is codified in regulations 42 CFR484.210(e).  Beginning January 1, 2010, home health agencies (HHAs) are required to submit an 
OASIS as a condition for payment. The MACs shall deny the claim if providers do not 
meet this regulatory requirement. The assessment must be patient specific, accurate and 
reflect the current health status of the patient.  This status includes certain OASIS 
elements used for calculation of payment.  These include documentation of clinical 
needs, functional status, and service utilization. 
 
B.  Plan of Care (POC) 
 
Comprehensive care planning is essential to good patient care under the Medicare 
program. In fact, it is specifically written into the coverage and/or certification 
requirements for a number of healthcare settings.  For purposes of the Part A benefit for 
home health, inpatient rehabilitation facility and hospice, the Social Security Act 
describes criteria and standards used for covering these services.  This includes 
establishing an individualized POC. 
 
The POC identifies treatment goals and coordination of services to meet patient needs as 
set forth in CFR 418.200 requirement for coverage.  The POC must be established by a 
physician(s).  However, in the case of a hospice, in addition to the physician, an 
interdisciplinary group shall establish a POC. 
 
Section 1814(a)(2)(C), Part B 1835(a)(2)(A) of the Act, and CFR 409.43 state that a 
POC established by a treating physician must contain all pertinent information, such as, 
the patient history, initial status, treatment goals, procedures/services duration, and 
progress notes. 
 
CFR412.622 requires an individualized POC by a rehabilitation physician that meets the 
requirements listed in the regulation.  MACs shall deny the claim as not meeting statutory 
requirements under the Social Security Act when the provider of services fails to comply 
with the POC requirements. 
 
Pursuant to 42 CFR 489.21, a provider of services shall not charge a beneficiary for 
services that have been denied for the reasons stated above. 
 
3.2.3.2 - Time - Frames for Submission 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs, RACs, CERT, SMRC, and UPICs, as 
indicated. 
 
In certain circumstances, the MACs, CERT, SMRC, RACs, UPICs and other contractors 
may not be able to make a determination on prepayment or post-payment claims they 
have chosen for review based upon the information on the claim, its attachments, or the 
billing history found in claims processing system (if applicable) or the Common Working 
File (CWF). In those instances, the reviewer shall solicit documentation from the 
provider or supplier by issuing an ADR.    
Contractors are authorized to collect medical documentation by the Social Security Act 
(the Act).  
 
Section 1815(a) of the Act states that "...no such payments shall be made to any provider 
unless it has furnished such information as the Secretary may request in order to 
determine the amounts due such provider under this part for the period with respect to 
which the amounts are being paid or any prior period." 
 
Section 1833(e) of the Act states that "[n]o payment shall be made to any provider of 
services or other person under this part unless there has been furnished such information 
as may be necessary in order to determine the amounts due such provider or other person 
under this part for the period with respect to which the amounts are being paid or for any 
prior period." 
 
In addition, Contractors are required to ensure that payment is limited to those items and 
services that are reasonable and necessary. 
 
Section 1862(a)(1)(A) of the Act states that [n]otwithstanding any other provision of this 
title, no payment may be made under part A or part B for any expenses incurred for items 
or services  which, except for items and services described in a succeeding 
subparagraph, are not reasonable and necessary for the diagnosis or treatment of illness or 
injury or to improve the functioning of a malformed body member. 
 
Contractors are required, when authoring correspondence related to ADRs, to cite 
sections 1815(a), 1833(e), and 1862(a)(1)(A) of the Act exclusively when referring to the 
authority for requiring submission of documentation. 
 
A.  Prepayment Review Time Frames 
 
When requesting documentation for prepayment review, the MACs and UPICs shall 
notify providers when they expect documentation to be received. The reviewer should not 
grant extensions to providers who need more time to comply with the request. Reviewers 
shall deny claims when the requested documentation to support payment is not received 
by the expected timeframe. 
 
B.  Post-payment Review Time Frames 
 
When requesting documentation for post-payment review, the MACs, CERT, SMRC, 
UPICs and RACs shall notify providers when they expect documentation to be received. 
MACs, CERT, SMRC, UPICs and RACs have the discretion to grant extensions to 
providers who need more time to comply with the request.  
 
The MACs, CERT, SMRC, UPICs and RACs shall deny claims when the 
requested documentation to support payment is not received by the 
expected timeframe (including any applicable extensions).   
C.  For esMD submissions 
 
The esMD review contractor shall use the Enterprise File Transfer (EFT) system receipt 
date as the date the documentation was received. If the EFT receipt date is outside of the 
contractors normal business hours, the following business day shall be used as the receipt 
date. Contractors shall pull for esMD files at least every 4 hours (business hours) daily; 
including a mandatory pulling between the hours of 6-7pm EST daily. If unforeseeable 
circumstances occur, in which contractors are not technically capable of retrieving 
documentation in a timely manner due to issues outside of their control, contractors are to 
notify the esMD Team and can use the date documentation was available to be retrieved 
once issues have been resolved in the EFT system. 
 
 
3.2.3.3 - Third-party Additional Documentation Request 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs, RACs, CERT and UPICs, as indicated. 
 
Unless otherwise specified, the MAC, RAC and UPIC shall request information from the 
billing provider/supplier. The treating physician, another clinician, provider, or supplier 
should submit the requested documentation. However, because the provider selected for 
review is the one whose payment is at risk, it is this provider who is ultimately 
responsible for submitting, within the established timelines, the documentation requested 
by the MAC, CERT, RAC and UPIC. 
 
The CERT reviewer shall request medical record documentation from the referring 
provider as submitted/identified by National Provider Identifier/Unique Physician 
Identification Number on the claim when such information is not sent in by the billing 
supplier/provider initially and after a request for additional documentation fails to 
produce medical documentation necessary to support the service billed and supported by 
the Local and National Coverage Determinations. 
 
The MAC, UPIC and RAC have the discretion to send a separate ADR to third- party 
entities involved in the beneficiarys care. They shall not solicit documentation from a 
third party unless they first or simultaneously solicit the same information from the 
billing provider or supplier. The following requirements also apply: 
 
  The MACs, UPICs and RACs shall notify the third party and the 
billing provider or supplier that they have 30 calendar days to 
respond for a prepayment review or 45 calendar days for a 
postpayment review for MACs and RACs and 30 calendar days for 
UPICs. 
 
  For prepayment review, the MACs and UPICs shall pend the claim 
for 45 calendar days. This 45 day time period may run concurrently  as the 45 days that the billing provider or supplier has to respond to 
the ADR letter; 
 
  The MACs and UPICs have the discretion to issue as many 
reminder notices as they deem appropriate to the third party via 
email, letter or phone call prior to the 30th or 45th calendar day, as 
discussed above; 
 
  When information is requested from both the billing provider or 
supplier and a third party and a response is received from one or 
both that fails to support the medical necessity of the service, the 
MACs and UPICs shall deny the claim, in full or in part, using the 
appropriate denial code. Contractors shall count these denials as 
medical record reviews. 
 
  Contractors shall include language in the denial notice reminding 
providers that beneficiaries cannot be held liable for these denials 
unless they received proper liability notification before services 
were rendered, as detailed in CMS Pub.100- 04, Medicare Claims 
Processing Manual, chapter 30. 
 
  Refer to3.2.3.7 for ADR to ordering providers for lab services. 
 
 
 
3.2.3.4 - Additional Documentation Request Required and Optional 
Elements 
(Rev. 557, Issued: 11-26-14, Effective: 12-29-14, Implementation: 12-29-14) 
 
This section applies to Medicare Administrative Contractors (MAC), Recovery Auditors, 
Comprehensive Error Rate Testing (CERT), and Supplemental Medical Review 
Contractors (SMRC), as indicated. 
 
  The MAC shall use discretion to ensure that the amount of medical 
documentation requested does not negatively impact the providers ability to 
provide care. 
 
  The Recovery Auditors shall issue Additional Documentation Requests (ADR) in 
accordance with limits established by their Contracting Officers Representative 
(COR) for each calendar year. 
 
  The MACs, CERT, SMRCs, and Recovery Auditors, shall request records related 
to the claim(s) being reviewed and have the discretion to collect documentation 
related to the beneficiarys condition before and after a service.  
    The MACs, Recovery Auditors, and SMRCs have the discretion to issue as many 
reminder notices as they deem appropriate.  Reminder notices can be issued via 
email, letter, or phone call. 
 
  The CERT shall issue reminder notices in accordance with its SOW. 
 
  The MACs, Recovery Auditors, and SMRCs shall not target their ADRs to 
providers based solely on the providers electronic health record status or chosen 
method of submitting records. 
 
When requesting documentation for postpayment medical review, the MACs, CERT, 
SMRCs and Recovery Auditors shall use the unified postpayment ADR letter format. 
Contractors shall maintain the format of the letter, but have the discretion to insert case-
specific information. In other words, contractors shall not change the order of the sections 
on the letter, but should modify the text underneath each section to provide detailed 
information and accurately reflect the information specific to the subject of the letter. The 
detailed text in the Exhibit 46 templates serves only to provide an example of what types 
of information belong under each section heading. The templates show the format and 
order contractors shall use when constructing postpayment ADR letters.  
 
If any of the elements are lengthy, contractors have the discretion to utilize an attachment 
to provide the details. If a contractor does not have attachments, but has supplementary 
information to provide in the text of the letter, the contractor should insert the text 
beneath the section title Attachments / Supplementary Information).  
 
The MACs, CERT, SMRCs and Recovery Auditors shall include the following elements 
in their ADRs and shall use the appropriate templates provided in Exhibit 46: 
 
A.  Introductory Paragraph 
  CMS as the government agency making the request; 
  The program making the request (e.g. the MAC program, the SMRC program, 
the Recovery Audit Program, the CERT program); and 
  The regulations and/or laws that apply to the request. 
 
The first paragraph in the ADR may identify the following: 
  The program purpose; 
  Where additional information about the program and regulations can be 
found, for example, a website reference; and 
  Additional program information that may be helpful to the provider or 
supplier. 
 
B.  Reason for Selection  
The reason the provider or supplier was sent the ADR letter and notes about the 
claims under review. 
 
C.  Action   The action(s) the provider or supplier shall take as a result of receiving the ADR 
letter.  
 
D.  When 
The date a provider/supplier shall reply to the ADR letter and submit the 
documentation to the contractor. 
 
E.  Consequences 
The consequences if the provider or supplier fails to submit the requested 
documentation.  
 
F.  Instructions 
Instructions and notes that will help the provider or supplier respond to the ADR 
letter.  
 
G. Submission Methods 
The methods the provider or supplier can submit the requested documentation.  
 
H. Questions 
Contractor contact information for provider inquiries related to the ADR. 
 
I.  Attachments / Supplementary Information 
  If there are attachments or other supplementary information associated with the 
ADR, provide a listing of the attachment titles or provide the supplementary 
information. 
 
3.2.3.5 - Acceptable Submission Methods for Responses to ADRs 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs, Recovery Auditors, CERT, and UPICs, as 
indicated. 
 
Reviewers shall be clear in their ADR letters about what documentation submission 
methods they will accept from a provider or Health Information Handler (HIH). The 
MACs, CERT, and Recovery Auditors shall accept documents via paper, fax, CD/DVD, 
and electronic submission of medical documentation (esMD). 
 
A.  Paper 
 
The MACs, CERT, and Recovery Auditors are encouraged to state in the 
ADRs that paper medical documentation can be mailed by any means 
including US Postal Service, FedEx, UPS, or certified mail. To facilitate 
delivery of documentation, MACs, CERT and Recovery Auditors should 
provide a physical mailing address instead of a P.O. Box. 
 
B.  Fax   
If the MACs, CERT, or Recovery Auditors have the capability to offer fax 
confirmation, they are encouraged to send such confirmations with every 
successfully received fax. 
 
C.  Imaged Medical Documentation File(s) Sent on CD/DVD 
 
The MACs and CERT shall state in the ADR that imaged medical 
documentation files on CD/DVD may be mailed by any means. Recovery 
Auditor ADRs shall provide a Web site link or phone number that provides 
information regarding the requirements for submitting imaged 
documentation on CD or DVD. 
 
D.  Medical Documentation Sent via Electronic Submission of Medical 
Documentation (esMD) Transmission 
 
Electronic Submission of Medical Documentation (esMD) is a system that allows 
providers/HIHs to submit medical documentation over secure electronic means. 
Information about the esMD system can be found at www.cms.gov/esMD. 
 
MACs and CERT are encouraged to state in their ADRs how providers can get more 
information about submitting medical documentation via the esMD mechanism. 
 
Any time a new esMD service or document type is being offered, and any contractor 
wants to publish a public announcement (Web posting, list serve, tweet, etc.) the 
contractor must clear the announcement with CMS. 
 
3.2.3.6 - Reimbursing Providers and HIHs for Additional 
Documentation 
(Rev. 786, Issued: 04-13-18, Effective: 05-14-18, Implementation: 05-14-18)  
 
A.  General 
 
1.  Rules for MACs, SMRC, CERT, and UPICs 
 
  The MACs, SMRC, CERT, and UPICs are not required to pay for medical 
documentation for either prepayment or post payment review. 
 
2.  Rules for RACs 
 
  RACs performing post payment review of hospital inpatient prospective payment 
system (PPS) and long term care facilities are required to pay the providers for 
submitting requested medical records. RACs shall pay according to the payment 
rate schedule listed in section B below. 
    RACs performing post payment review of provider types other than hospital 
inpatient PPS and long term care facilities are required to pay the providers for 
submitting requested medical records, according to the payment rate schedule 
listed in section B below.  
 
  Providers under a Medicare reimbursement system (such as Critical Access 
Hospitals) receive no reimbursement for submitting medical records. 
 
  RACs shall pay a maximum of $15.00 per record, including first class postage if 
applicable, for requested documents submitted via mail/fax/CD/DVD. 
 
  RACs shall pay a maximum of $27.00 per record, including a transaction fee of 
$2.00/case, for requested documents submitted via esMD. 
 
  Payments will not be made for blank pages or documents/records that are not 
related to the claim being reviewed. 
 
  RACs shall issue documentation submission payments on at least a monthly basis 
and shall issue all photocopying payments within 45 calendar days of receiving 
the documentation. 
 
RACs shall honor all requests from providers to issue photocopying payments to 
HIHs. RACs should gather, from the provider, all necessary information, such as, 
the HIHs name, phone number and bank routing number, etc. 
 
  Providers interested in submitting documentation via esMD can find information 
on the CMS esMD website at http://www.cms.gov/esMD. 
 
 
B. Payment Schedule for Requested Medical Records 
 
  Hospital Inpatient Prospective Payment System  Non-PPS Institutions 
(PPS) Facilities  and Practitioners 
 and 
Long Term Care Facilities 
Documentation  -  15 cents per page 
sent via mail, fax,  -  12 cents per page  -  Plus first class 
CD/DVD  -  Plus first class postage, if applicable  postage, if applicable 
-  $15.00 maximum per record  -  $15.00 maximum per 
  record 
 
Documentation  -  12 cents per page  -  15 cents per page 
sent via esMD  -  Plus $2.00 transaction fee, per record  -  Plus $2.00 transaction 
-  $27.00 maximum per record  fee, per case  -  $27.00 maximum per 
record  
 
*Note: Providers under a Medicare reimbursement system (such as Critical Access 
Hospitals) receive no reimbursement for submitting medical records. Also, payments will 
not be made for blank pages or documents/records that are not related to the claim being 
reviewed. 
 
3.2.3.7 - Special Provisions for Lab Additional Documentation Requests 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs, CERT, RACs, UPICs, and SMRC as 
indicated. 
 
ICD-10-CM is used for diagnoses on inpatient discharges and for other services provided 
upon implementation of ICD-10. ICD-9-CM is used for discharges and other services 
before that implementation. 
 
When the MACs, CERT, RACs, and UPICs send an ADR for a lab service, the following 
documentation shall be requested from the billing lab: 
 
  The order for the service billed (including sufficient information to 
allow the reviewer to identify and contact the ordering provider); 
 
  Verification of accurate processing of the order and submission of 
the claim; and 
 
  Diagnostic or other medical information supplied to the lab by the 
ordering provider, including any diagnosis codes or narratives. 
 
The contractor shall deny the claim if a benefit category, statutory exclusion, or coding 
issue is in question, or send an ADR to the ordering provider in order to determine 
medical necessity. The contractor shall review information from the lab and find it 
insufficient before the ordering provider is contacted. The contractor shall send an ADR 
to the ordering provider that shall include sufficient information to identify the claim in 
question. 
 
If the documentation received does not demonstrate that the service was reasonable and 
necessary, the contractor shall deny the claim. These denials count as medical record 
reviews. Contractor denial notices shall remind providers that beneficiaries cannot be 
held liable for these denials unless they have received proper liability notification before 
services were rendered, as detailed in CMS Pub. IOM 100-04, chapter 30. 
 
3.2.3.8 - No Response or Insufficient Response to Additional 
Documentation Requests  (Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs, RACs, CERT, SMRC, and UPICs, as 
indicated. 
 
A.  Additional Documentation Requests 
 
The reviewer authority to request that documentation be submitted, to support claims 
payment, is outlined in Section 3.2.3.2 of this chapter. 
 
If information is requested from both the billing provider or supplier and/or a third party 
and no response is received within the expected timeframes (or within a reasonable time 
following an extension), the MACs, RACs, SMRC, and UPICs shall deny the claim, in 
full or in part, as not reasonable and necessary. Contractors shall use Group Code:  CO - 
Contractual Obligation and Claim Adjustment Reason Code (CARC) 50 - these are non-
covered services because this is not deemed a medical necessity by the payer and 
Remittance Advice Remark Code (RARC) M127 - Missing patient medical record for 
this service. 
 
MACs shall count these denials as automated review or non-medical record review 
depending whether the denial is automated or requires manual intervention. For claims 
that had a PWK modifier, and the unsolicited documentation was reviewed, the review 
shall be counted as medical record review. 
 
B.  No Response 
 
During prepayment review, if no response is received within the expected timeframes, the 
MACs and UPICs shall deny the claim. 
 
During post-payment review, if no response is received within the expected timeframes 
(or extension), the MACs, RACs, UPICs and SMRC shall deny the claim as not 
reasonable and necessary. These contractors shall cite sections 1815(a), 1833(e), and 
1862(a)(1)(A) of the Act exclusively when referring to the authority for requiring 
submission of documentation, when denying claims for no response within the expected 
timeframes. The MACs shall count these denials as non-medical record reviews. 
 
C.  Insufficient Response 
 
If the MAC, CERT, RAC, SMRC, or UPIC requests additional documentation to verify 
compliance with a benefit category requirement, and the submitted documentation lacks 
evidence that the benefit category requirements were met, the reviewer shall issue a 
benefit category denial. If the submitted documentation includes defective information 
(the documentation does not support the physicians certification), the reviewer shall 
deny the claim as not meeting the reasonable and necessary criteria. 
  3.2.3.9 - Reopening Claims with Additional Information or Denied due 
to Late or No Submission of Requested Information 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
Contractors shall make available general reopening process information via their website, 
in their ADR letters, or through remittance advice notices. 
 
If the MACs receive the requested information from a provider or supplier after a denial 
has been issued but within a reasonable number of days (generally 15 calendar days after 
the denial date), they have the discretion to reopen the claim. MACs who choose to 
reopen a specific claim shall notify the provider or supplier of their intent to reopen that 
claim. Notification to the provider/supplier of the intent to reopen a specific claim shall 
be completed through any of the following mechanisms: Interactive Voice Response 
(IVR), contractor website portal, telephone contact, by letter, fax, email or secure 
messaging within 3 business days of identification of the request to reopen or receipt of 
medical record documentation. MR will make an MR determination on the lines 
previously denied due to failure to submit requested documentation, and do one of the 
following, within 60 calendar days of receiving documentation in the mailroom: 
 
  For claims originally selected for postpayment review, the reviewer 
shall issue a new letter containing the revised denial reason and the 
information required by PIM chapter 3 3.6.4; 
 
  For claims originally selected for prepayment review, the MAC 
shall enter the revised MR determination into the shared system, 
generating a new Medicare Summary Notice (MSN) and 
remittance advice with the new denial reason and appeals 
information; 
 
  The workload, costs, and savings associated with this activity shall 
be allocated to the appropriate MR activity (e.g., MR reopenings); 
 
In cases where the MAC or UPIC denied a claim and the denial is appealed, the appeals 
entity will send the claim to the contractors MR department for reopening in accordance 
with CMS Pub. IOM 100-04, chapter 34,  10.3. The claim sent back to the contractors 
MR department must have been denied using Group Code: CO - Contractual Obligation 
and Claim Adjustment Reason Code (CARC) 50 - these are non-covered services because 
this is not deemed a medical necessity by the payer and Remittance Advice Remark 
Code (RARC) M127 - Missing patient medical record for this service. 
 
The MR department of the contractor (AC, MAC, or UPIC) who initiated the prepayment 
edit shall be responsible for conducting the reopening. 
 
  The MACs who choose not to reopen claims when documentation 
is received past the deadline shall retain the information (hardcopy 
or electronic) in a location where it can be easily accessed.   
If the RAC receives requested documentation from a supplier after a denial has been 
issued they shall not reopen the claim. 
 
  If a RAC receives documentation after the submission deadline, 
but before they have issued a demand letter, the RAC shall review 
and consider the late documentation when making a claim 
determination; 
 
  If the RAC receives a late response to a documentation request 
after they have issued a demand letter, the RAC shall retain the 
documentation so that it is available for review during the appeal 
process. 
 
For information on how CERT handles late documentation, please refer to Chapter 12, 
Section 12.3.9. 
 
3.2.3.10 - Record Retention and Storage 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
The MACs, CERT, and UPICs shall abide by all documentation retention requirements 
listed in all litigation holds issued via Joint Signature Memoranda or Technical Direction 
Letters (JSM/TDL). Recovery Auditors shall comply with the record retention 
requirements in its SOWs. 
 
3.2.4 - Use of Claims History Information in Claim Payment 
Determinations 
(Rev. 802; Issued: 06-22-18; Effective: 07-24-18; Implementation: 07-24-18) 
 
A.  Contractors to Which This Section Applies 
 
This section applies to MACs, CERT, SMRC, and RACs. 
 
B.  General  
 
In certain circumstances it may be appropriate for medical reviewers to use relevant and 
accessible claims history to assist in making medical record review determinations. 
Examples of when this may be used for payment purposes, include, but are not limited to:   
 
1. Reviewers have the discretion to use beneficiary payment history to identify other 
providers, other than the billing entity, who may have documentation to support payment 
of a claim.  MAC, CERT and RAC reviewers have the discretion to contact identified 
providers for supporting documentation. Example: A diabetic beneficiary may have an 
order from a family practitioner but is also seeing an endocrinologist. The documentation 
from the family practitioner does not support the level of diabetic testing, but medical 
records from the endocrinologist do support the level of testing.    
2. Reviewers have the discretion to use claims history information to document an event, 
such as a surgical procedure, that supports the need for a service or item billed in limited 
circumstances. In some cases, this event occurs a number of years prior to the date of 
service on the claim being reviewed, making it difficult to collect medical record 
documentation. If repeated attempts to collect medical record of the event are 
unsuccessful, contractors have the discretion to consider claims history information as 
documentation of the event. Contractors shall document their repeated attempts to collect 
the medical record if they chose to consider claims history information as documentation 
of the event. Example: A beneficiary is eligible for immunosuppressant drugs only if they 
received an organ transplant. Patients generally remain on these life-saving drugs for the 
rest of their life so it is possible for the transplant to have occurred many years prior to 
the date of service being reviewed. If there was no record of the transplant in the medical 
documentation provided by the ordering physician, the contractor may use claims history 
to validate the transplant occurred.  
 
3. Reviewers shall use claims history information to verify that the frequency or quantity 
of supplies provided to a beneficiary do not exceed policy guidelines.  
 
4. Reviewers shall use claims history information to identify duplication and 
overutilization of services. 
 
3.2.5 - Targeted Probe and Educate (TPE) 
(Rev. 10132; Issued: 05-15-2020; Effective: 06-16-2020; Implementation: 06-16-
2020) 
 
This section applies to MACs. 
 
A. Overview 
 
The purpose of Targeted Probe and Educate (TPE) is to decrease provider burden, reduce 
appeals, and improve the medical review/education process. 
 
This section describes requirements that MACs shall follow when performing medical 
review as part of TPE. 
 
TPE reviews can be either prepayment or postpayment and involve MACs focusing on 
specific providers/suppliers that bill a particular item or service. 
 
A round of TPE typically involves the review of 20-40 claims, per provider/supplier, per 
service/item, and corresponding education. In rare circumstances, CMS may approve a 
probe sample of other than 20-40 claims. This process is typically repeated for up to three 
rounds, but may involve additional rounds at CMS direction. MACs discontinue the 
process if/when providers/suppliers become compliant. Providers/suppliers who remain 
non-compliant after three rounds of TPE are referred to CMS for further action. 
  B. Provider Selection 
 
The MACs shall initiate a provider-specific, prepayment or postpayment review based 
upon data analysis, as discussed in 3.2.1. MACs shall also initiate targeted, provider-
specific, prepayment or postpayment review upon referral from the Recovery Auditor 
Contractor (RAC), Comprehensive Error Rate Testing (CERT), Unified Program 
Integrity Contractor (UPIC), Office of Inspector General (OIG), or Government 
Accountability Office (GAO) when directed by CMS. MACs shall target 
providers/suppliers who have historically high claim denial rates, who have billing 
practices that vary from their peers, or when evidence suggests that there is a potential 
risk to the Medicare Trust Fund. 
 
Probe Selection 
 
The MACs shall select probe samples of typically 20-40 claims. Probe samples of 
different sizes may be deemed appropriate on a case-by-case basis, with approval by 
CMS. 
 
Provider Notification Letter 
 
The MACs shall send a notification letter to providers/suppliers being targeted for review 
that: 
 Outlines the targeted probe & educate process, 
 Explains the process by which providers/suppliers will be able to receive one-
on-one education and the types of education that will be available, 
 Notifies providers/suppliers that MACs shall have the option to refer 
providers/suppliers to the RAC or UPIC as a result of non-response to Additional 
Development Requests (ADRs), and 
 Includes the following language to remind providers of 42 CFR 424.535 
 
In addition, we remind you that the regulation at 42 CFR 424.535 authorizes us to 
revoke Medicare billing privileges under certain conditions. In particular, we note that 
per 42 CFR 424.535(a)(8)(ii), CMS has the authority to revoke a currently enrolled 
provider or suppliers Medicare billing privileges if CMS determines that the provider or 
supplier has a pattern or practice of submitting claims that fail to meet Medicare 
requirements. 
C. TPE One-On-One Education 
 
For the TPE process, one-on-one education is defined as teleconference calls, face-to-
face visits, electronic visits using webinar technology, or other similar technologies that 
enable direct communication between the MAC educator and the provider/supplier. 
MACs shall record these activities in monthly reporting to CMS as well as document and 
maintain the results of the education, and/or attempts for education, for data analysis and 
possible future reporting. 
 
Intra-Probe Education   
The MAC may identify errors in the claim(s) that can be easily resolved during the 
course of providers/suppliers probe reviews. Easily curable errors include, but are not 
limited to, missing documentation that can be resolved through the submission of 
additional documentation and missing signatures that can be resolved with a signature 
attestation. When the MAC identifies an easily curable error, the MAC shall contact the 
provider to address the error and allow the provider to submit missing documentation, 
etc. 
 
Post-Probe Education 
 
The MAC shall contact the provider/supplier via telephone (or face-to-face, electronic 
visits using webinar technology, or other similar technologies as they become available) 
to offer a one-on-one educational session after each round of probe review. If the 
provider/supplier declines the offer for one-on-one education, MACs shall maintain a 
record of the effort and the reason for denial. The purpose of this one-on-one education is 
to: 
 
1) Alert the provider of errors identified and how they may be resolved for future 
claim submissions; and 
2) Provide education regarding the review topic to help prevent new issues from 
arising during future rounds of review. This post-probe one-on-one education 
should be individualized, claims-specific, and conducted in a format that is 
interactive, allowing the provider/supplier to ask questions as needed. 
 
The MAC shall provide a minimum of 45 days after each post-probe educational session, 
before selecting new claims for review, to allow time for the provider/supplier to cure 
identified errors. 
 
D. Post-Probe Activity 
 
Final Results Letter 
 
The MAC shall send the provider/supplier a letter detailing the results of the claims 
reviewed at the conclusion of each round of review. The MAC shall include details 
regarding the providers/suppliers specific claim errors. For providers/suppliers who will 
be released from review due to meeting the established error rate goal, results letters shall 
indicate that the provider is being released from review for one year, with the caveat that 
additional review may occur at any time should the MAC identified changes in billing 
pattern. For providers/suppliers who continue to have high error rates after three rounds 
of TPE review, results letters shall indicate that they have not met the established goal 
error rate and will be referred to CMS for additional action, which may include additional 
rounds of TPE review, 100 percent prepayment review, extrapolation, referral to a 
Recovery Auditor, and/or referral for revocation. Additionally, the letter shall include the 
following language to remind providers of 42 CFR 424.535. 
  In addition, we remind you that the regulation at 42 CFR 424.535 authorizes us 
to revoke Medicare billing privileges under certain conditions. In particular, we 
note that per 42 CFR 424.535(a)(8)(ii), CMS has the authority to revoke a 
currently enrolled provider or suppliers Medicare billing privileges if CMS 
determines that the provider or supplier has a pattern or practice of submitting 
claims that fail to meet Medicare requirements. 
 
Determining the Need for Additional TPE 
 
The MAC shall calculate the provider/supplier claim error rate and payment error rate at 
the conclusion of each round of TPE. The MAC shall use the provider/supplier error rate 
to determine whether an additional round of TPE is appropriate. 
 
Closure and Monitoring 
 
A provider/supplier may be removed from TPE after any round if they demonstrate low 
error rates or sufficient improvement in error rates, as determined by the MAC. MACs 
shall use data analysis to monitor the providers/suppliers who have been discontinued 
from the TPE process. MACs shall conduct follow-up review in one year or sooner if 
data analysis indicates changes in billing patterns or when potential risk to the Medicare 
Trust Fund is identified. 
 
E. Referrals 
 
If a provider/supplier continues to have a high error rate at the conclusion of three rounds 
of TPE, the MAC shall refer to CMS for further action. Referrals shall include details 
regarding the reason the provider/supplier was selected for TPE review, TPE review 
results, results of appealed denials (to the extent available at the time of referral), any 
education provided (or offered and refused), and any other relevant information that may 
be helpful in determining appropriate next steps. 
 
The MAC shall refer suspected fraudulent providers to the UPIC at any time during the 
TPE process. 
 
F. Next Steps 
 
Once the MAC refers a provider/supplier to CMS, details are reviewed to determine if 
additional action must be taken by the MAC. Additional actions that may be required 
include, but are not limited to, additional rounds of TPE review, 100 percent prepayment 
review, extrapolation, referral to a Recovery Auditor, and/or referral for revocation. If 
CMS directs the MAC to conduct an additional round of TPE review, the MAC shall 
send the provider/supplier a notification letter indicating that an additional round of 
review is required.  These reviews shall be of claims with dates of service at least 45 days 
after the prior rounds post probe education and after the provider/supplier has received 
the aforementioned notification letter. 
  3.3  Policies and Guidelines Applied During Review 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs, CERT, Recovery Auditors, Supplemental Medical Review 
Contractors (SMRCs) and UPICs, as indicated. 
 
A. Statutes, Regulations, the CMS Rulings, National Coverage 
Determinations, Coverage Provisions in Interpretive Medicare 
Manuals, and Local Coverage Determinations 
 
The primary authority for all coverage provisions and subsequent policies is the Social 
Security Act. In general, MACs, CERT, Recovery Auditors, SMRCs, and UPICs shall 
apply the provisions of the Act according to the following hierarchy of documents in 
effect at the time the item(s) or service(s) was provided to make medical review 
decisions: 
 
Social Security Act  
Code of 
Federal Regulations CMS 
Rulings 
National Coverage Determination (NCDs) 
Coverage  provisions  in  Interpretive  Manuals  or  Internet  Only 
Manuals (IOM) which includes Medical Review Guidance in the 
Medicare Program Integrity Manual 
CMS coding policies 
Technical Direction Letters (TDLs)* The relevant MACs Local 
Coverage Determination (LCDs) The relevant MACs local articles 
AHA Coding Clinics. 
 
*TDLs that contain MR guidance may provide an exception to this 
hierarchy. 
 
B.  Coding Guidelines 
 
The MACs, CERT, Recovery Auditors, and UPICs shall apply coding guidelines to 
services selected for review. All contractors shall determine that an item/service is 
correctly coded when it meets all the coding guidelines listed in the Current Procedural 
Terminology-4 (CPT) book, International Classification of Diseases Guidelines (ICD), 
CMS HCPCS or ICD policy or guideline requirements, LCDs, or MAC articles. 
 
C.  Internal Medical Review Guidelines 
 
The MAC, CERT, Recovery Auditor, and UPIC staffs have the discretion to develop 
detailed written review guidelines to guide staff during claim reviews. Internal MR 
guidelines shall specify the information to be reviewed by reviewers and the appropriate 
resulting determination. Recovery Auditors are required to develop written review  guidelines in accordance with their SOW. The MACs, CERT, Recovery Auditors, and 
UPICs shall make their internal MR guidelines available to their staff, as needed. Internal 
MR Guidelines shall not create or change the CMS policy. 
 
3.3.1 - Types of Review: Medical Record Review, Non-Medical Record 
Review, and Automated Review 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs, CERT, SMRC, and UPICs, as indicated. 
 
A. General 
 
Most of the claim review activities completed for the purpose of identifying inappropriate 
billing and avoiding improper payments are divided into three distinct types: Medical 
Record Review, Non-Medical Record Review, and Automated Review. 
 
The chart below indicates which contractors perform which types of review: 
 
Prepayment  Postpayment 
  Medical  Non-    Medical  Non- 
Contractor  Record  Medical  Automated  Record  Medical 
Type  Review  Record  Reviews  Review  Record 
    Review      review 
MACs  Yes  Yes  Yes  Yes  Yes 
CERT  No  No  No  Yes  No 
RACs  No  No  No  Yes  No 
SMRC  No  No  No  Yes  Yes 
UPIC  Yes  No  No  Yes  Yes 
 
 
3.3.1.1 - Medical Record Review 
(Rev. 11529; Issued: 07-28-2022; Effective: 08-30-2022; Implementation: 08-30-
2022) 
 
This section applies to MACs, CERT, RACs, Supplemental Medical Review 
Contractor(s) and UPICs, as indicated. 
 
A.  Definition 
 
Medical record review involves requesting, receiving, and reviewing medical 
documentation associated with a claim. 
 
Medical record review, for the purpose of determining medical necessity, requires a 
licensed medical professional to use clinical review judgment to evaluate medical record 
documentation.   
B.  Clinical Review Judgment 
 
Clinical review judgment involves two steps: 
 
1.  The synthesis of all submitted medical record information (e.g. progress notes, 
diagnostic findings, medications, nursing notes, etc.) to create a longitudinal clinical 
picture of the patient; and 
 
2.  The application of this clinical picture to the review criteria is to make a reviewer 
determination on whether the clinical requirements in the relevant policy have been 
met. MAC, CERT, RAC, and UPIC clinical review staff shall use clinical review 
judgment when making medical record review determinations about a claim. 
 
Clinical review judgment does not replace poor or inadequate medical records. 
Clinical review judgment by definition is not a process that MACs, CERT, RACs and 
UPICs can use to override, supersede or disregard a policy requirement. Policies 
include laws, regulations, the CMS rulings, manual instructions, MAC policy articles 
attached to an LCD or listed in the Medicare Coverage Database, national coverage 
decisions, and local coverage determinations. 
 
C.  Credentials of Reviewers 
 
The MACs, MRAC, and CERT shall ensure that medical record reviews for the purpose 
of making coverage determinations are performed by licensed nurses (RNs), therapists or 
physicians. Current LPNs may be grandfathered in and can continue to perform medical 
record review. The MACs, MRAC, and CERT shall not hire any new LPNs to perform 
medical record review. UPICs, RACs and the SMRC shall ensure that the credentials of 
their reviewers are consistent with the requirements in their respective SOWs. 
 
During a medical record review, nurse and physician reviewers may call upon other 
health care professionals (e.g., dieticians or physician specialists) for advice. The MACs, 
MRAC, and CERT, shall ensure that services reviewed by other licensed health care 
professionals are within their scope of practice and that their MR strategy supports the 
need for their specialized expertise in the adjudication of particular claim type (i.e., 
speech therapy claim, physical therapy). RACs and the SMRC shall follow guidance 
related to calling upon other healthcare professionals as outlined in their respective 
SOWs. 
 
RACs shall ensure that a licensed medical professional will perform medical record 
reviews for the purpose of determining medical necessity, using their clinical review 
judgment to evaluate medical record documentation. Certified coders will perform coding 
determinations. CERT and MACs are encouraged to make coding determinations by 
using certified coders. UPICs have the discretion to make coding determinations using 
certified coders. 
  D.  Credential Files 
 
The MACs, MRAC, CERT, RACs, and UPICs shall maintain a credentials file for each 
reviewer (including consultants, contract staff, subcontractors, and temporary staff) who 
performs medical record reviews. The credentials file shall contain at least a copy of the 
reviewers active professional license. 
 
E.  Quality Improvement (QI) Process 
 
The MACs, CERT, RACs, and SMRCs shall establish a Quality Improvement (QI) 
process that verifies the accuracy of MR decisions made by licensed health care 
professionals. The MACs, CERT, RACs, and SMRCs shall attend the annual medical 
review training conference as directed by the CMS and/or their SOW. The MACs, CERT, 
RACs, and SMRCs shall include inter-rater reliability assessments in their QI process and 
shall report these results as directed by CMS. 
 
F.  Advanced Beneficiary Notice (ABN) 
 
The MACs, CERT, RACs, UPICs, and SMRCs shall request as part of the ADR, during a 
medical record review, a copy of any mandatory ABNs, as defined in Pub. 100- 04, 
Medicare Claims Processing Manual Chapter 30 section 50.3.1. If the claim is 
determined not to be reasonable and necessary, the contractor will perform a face validity 
assessment of the ABN in accordance with the instructions stated in Pub. 100-04 
Medicare Claims Processing Manual chapter 30 section 50.6.3. 
 
The Face Validity assessments do not include contacting beneficiaries or providers to 
ensure the accuracy or authenticity of the information. Face Validity assessments will 
assist in ensuring that liability is assigned in accordance with the Limitations of Liability 
Provisions of section 1879 of the Social Security Act. 
 
G.  MAC Funding Issues 
 
The MAC-medical record review work performed by medical review staff for purposes 
other than MR (e.g., appeals) shall be charged, for expenditure reporting purposes, to the 
area requiring medical review services. 
 
All medical record review work performed by MACs shall: 
 
  Involve activities defined under the Medicare Integrity Program 
(MIP) at Section 1893(b)(1) of the Act; 
  Be articulated in its medical review strategy; and 
  Be designed in such a way as to reduce its Comprehensive Error 
Rate Testing (CERT) error rate or prevent the contractors error 
rate from increasing. 
 
The MACs shall be mindful that edits suspending a claim for medical review to check for  issues other than inappropriate billing (i.e. completeness of claims, conditions of 
participation, quality of care) are not medical review edits as defined under Section 
1893(b)(1) of the Act and cannot be funded by MIP. Therefore, edits resulting in work 
other than that defined in Section1893 (b) (1) shall be charged to the appropriate Program 
Management activity cost center. Activities associated with claims processing edits shall 
not be charged to MIP. 
 
H.  Review Timeliness Requirements 
 
Prepayment Review Requirements for MACs 
 
When a MAC receives requested documentation for prepayment review within 45 
calendar days of the date of the ADR, the MAC shall do the following within 30 calendar 
days of receiving the requested documentation: 1) make and document the review 
determination and 2) enter the decision into the Fiscal Intermediary Shared System 
(FISS), Multi-Carrier System (MCS), or the VIPS Medicare System (VMS). The 30 
calendar day timeframe applies to prepayment non-medical record reviews and 
prepayment medical record reviews. The 30 calendar day timeframe does not apply to 
prepayment reviews of Third Party Liability claims. The MACs shall make and enter a 
review determination for Third Party Liability claims within 60 calendar days. 
 
Counting the 30 Calendar Day Timeframe 
 
The MACs and RACs shall count day one as the date each new medical record is 
received in the mailroom. The MACs and RACs shall give each new medical record 
received an independent 30 day review time period. 
 
Prepayment Review Requirements for UPICs 
 
When a UPIC receives all documentation requested for prepayment review within 45 
calendar days of the date of the ADR, the UPIC shall make and document the review 
determination and notify the MAC of its determination within 60 calendar days of 
receiving all requested documentation. Medical review for the purpose of fraud, waste, or 
abuse requires 60 days to allow for the integration of information from the investigative 
process. This information may be a result of recent/concurrent investigative actions such 
as beneficiary/provider/supplier interviews, site visits and/or receipt of additional 
internal/external information. 
 
Post-payment Review Requirements for MACs 
 
The MAC shall make a review determination, and mail the review results notification 
letter to the provider within 60 calendar days of receiving the requested documentation. 
 
For claims associated with any referrals to the UPIC for program integrity investigation, 
MACs shall stop counting the 60-day time period on the date the referral is made. The 
60-day time period will be restarted on the date the MAC received requested input from  the UPIC or is notified by the UPIC that the referral has been declined. 
 
For claims sent to MR for reopening by the contractor appeals department, in accordance 
with Pub. 100-04, chapter 34, 10.3, begin counting the 60 days from the time the 
medical records are received in the MR department. 
 
Post-payment Review Requirements for RACs 
 
When a RAC receives requested documentation for review within 45 calendar days of the 
date of the ADR, the RAC shall do the following within 30 calendar days of receiving the 
requested documentation: 1) make and document the review determination, and 2) 
communicate the results to the provider. 
 
State Laws that Affect Prepayment Review Timeliness Requirements 
 
The MACs shall adhere to state laws that require an evidentiary hearing for the 
beneficiary before any denials are processed. The MAC shall review the claim within 30 
days, allow the time required for the evidentiary hearing, and then continue with the 
processing of the claim on the next business day. 
 
Post-payment Review Requirements for UPICs 
 
To promote the timeliness of the investigative process, the UPICs shall complete post-
payment medical review and provide the lead investigator with a final summary of the 
medical review findings that includes reference to the allegations being substantiated/not 
substantiated by medical review, reasons for denials, and any observations or trends 
noted within 60 calendar days, unless otherwise directed by CMS. The counting for the 
60-day time period begins when all of the documentation is received by the UPIC. The 
UPIC shall have a HIPAA compliant process to receive this documentation that includes 
the application of the date the documents are received at the UPICs designated mailing 
address for all methods described in section 3.2.3.5 of this chapter. The medical review 
unit shall communicate the medical review findings in a summary document to the 
investigative lead within 60 calendar days of receiving all of the requested 
documentation. Medical review for the purpose of fraud, waste, or abuse requires 60 days 
to allow for the integration of information from the investigative process. This 
information may be a result of recent/concurrent investigative actions such as 
beneficiary/provider/supplier interviews, site visits and/or receipt of additional 
internal/external information. 
 
If the UPIC is unable to complete the post-payment medical review in 60 days, they shall 
document this and the reason for the delay in the UCM, and communicate this to their 
COR. 
 
3.3.1.2 - Non-Medical Record Review 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
  This section applies to MACs, SMRC, and UPICs, as indicated. 
 
A. Definition 
 
Non-medical record reviews uses manual intervention, but only to the extent a reviewer 
can make a determination based on information on a claim. It does not require clinical 
judgment in review of medical record documentation. Contractors shall only perform a 
non-medical record review for denials of related claims and/or no receipt of ADR 
documentation where such denials cannot be automated. 
 
3.3.1.3 - Automated Review  
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
A.  Definition 
 
A medical review is considered automated when a payment decision is made at the 
system level, using available electronic information, with no manual intervention. 
 
CERT refers to all reviews where no documentation was requested as T-claim review. 
T-claims are a particular category of claim reviewed by CERT. T-claims are claims that 
were automatically denied by the MAC. 
 
B.  Basis for Automated Reviews 
 
The MAC, RAC, CERT, SMRC, and UPIC shall ensure that automated prepayment and 
postpayment denials are based on clear policy that serves as the basis for denial; or a 
Medically Unlikely Edit (MUE); or occurs when no timely response is received to an 
ADR. 
 
When a clear policy exists (or in the case of a MUE), MACs, RACs, SMRC, and UPICs 
have the discretion to automatically deny the services without stopping the claim for 
manual review, even if documentation is attached or simultaneously submitted. 
Reviewers shall still make a determination based on the liability limitations of 1879 of 
the Act. The term clear policy means a statute, regulation, NCD, coverage provision in 
an interpretive manual, coding guideline, LCD or MAC article that specifies the 
circumstances under which a service will always be considered non-covered, incorrectly 
coded, or improperly billed. 
 
A MUE is a unit of service (UOS) edit for a Healthcare Common Procedure Coding 
system (HCPCS)/Current Procedural Terminology (CPT) code for services rendered by a 
single provider/supplier to a single beneficiary on the same date of service. The ideal 
MUE is the maximum UOS that would be reported for a HCPCS/CPT code on the vast 
majority of appropriately reported claims. The MUE program provides a method to report 
medically reasonable and necessary UOS in excess of a MUE. 
 
Automated edits can be used for apparent typographical errors (e.g., 10,000 blood  cultures for the same beneficiary on the same day). 
 
MACs shall implement automated prepayment review whenever appropriate. 
 
The RACs refer to all reviews where no documentation was requested as automated 
review. 
 
3.3.2 - Medical Review Guidance 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs, CERT, Recovery Auditors, and UPICs, as 
indicated. 
 
This section describes the requirements that MACs, CERT, Recovery Auditors, and 
UPICs shall follow when reviewing submitted documentation. Additional requirements 
for UPICs are located in PIM chapter 4. When UPIC staff is performing benefit integrity 
reviews, their focus is different than that of MACs, CERT, and Recovery Auditors. For 
example, UPIC staff looks for some of the following situations when reviewing 
documentation: 
 
  Possible falsification or other evidence of alterations including, but 
not limited to: obliterated sections; missing pages, inserted pages, 
white out; and excessive late entries; 
 
  Evidence that the service billed for was actually provided; or, 
 
  Patterns and trends that may indicate potential fraud. 
 
 
3.3.2.1 - Documents on Which to Base a Determination 
(Rev. 802; Issued: 06-22-18; Effective: 07-24-18; Implementation: 07-24-18) 
 
This section applies to MACs, CERT, RACs, SMRC and UPICs, as indicated.  
 
The MACs, CERT, RACs, SMRC, and UPICs shall review any information necessary to 
make a prepayment and/or postpayment claim determination, unless otherwise directed in 
this manual. This includes reviewing any documentation submitted with the claim and 
any other documentation subsequently requested from the provider or other entity when 
necessary. In certain circumstances it may be appropriate for medical reviewers to 
consider relevant and accessible billing history or other information obtained from the 
Common Working File (in limited circumstances), outcome assessment and information 
set (OASIS), or the minimum data set (MDS), among others. For Medicare to consider 
coverage and payment for any item or service, the information submitted by the supplier 
or provider must corroborate the documentation in the beneficiarys medical 
documentation and confirm that Medicare coverage criteria have been met. 
  3.3.2.1.1 - Progress Notes and Templates 
(Rev. 833; Issued: 10-12-18; Effective: 11-13-18; Implementation: 11-13-18) 
 
A.  Definitions 
 
For the purposes of Section 3.3.2.1.1, the following definitions apply: 
 
1.  "Progress Notes" -- visit notes, encounter notes, Evaluation and Management 
documentation, office notes, face-to-face evaluation notes or any other type of record of 
the services provided by a physician or other licensed/certified medical professional 
(LCMP) in the medical record.  Progress notes may be in any form or format, hardcopy 
or electronic.   
 
2.  "Template" -- a tool/instrument/interface that assists in documenting a progress note.  
Templates may be paper or electronic.  
 
Electronic records may involve any type of interface including but not limited to: 
 
simple electronic documents,  
 
sophisticated graphical user interfaces (GUIs) with clinical decision and documentation 
support prompts, or  
 
electronic pen capture devices.  
 
Licensed/Certified Medical Professional (LCMP)  Medical professional licensed or 
certified to practice in the state in which services are rendered.  For the purposes of 
documenting DMEPOS items, the physician or LCMP must not have a financial 
relationship with the DMEPOS supplier. 
 
B.  Guidelines Regarding Which Documents Review Contractors Will Consider 
 
The review contractor shall consider all medical record entries made by physicians and 
LCMPs.  See PIM 3.3.2.5 regarding consideration of Amendments, Corrections and 
Delayed Entries in Medical Documentation. 
 
The amount of necessary clinical information needed to demonstrate that all coverage and 
coding requirements are met will vary depending on the item/service.  See the applicable 
National and Local Coverage Determination for further details. 
 
CMS does not prohibit the use of templates to facilitate record-keeping.  CMS also does 
not endorse or approve any particular templates except for the clinical templates it 
publishes on its website.  A physician/LCMP may choose any template to assist in 
documenting medical information.  Contractors shall consider information captured in 
templates when conducting medical review.    
  Some templates provide limited options and/or space for the collection of information 
such as by using check boxes, predefined answers, limited space to enter information, 
etc.   CMS discourages the use of such templates.  Claim review experience shows that 
that limited space templates often fail to capture sufficient detailed clinical information to 
demonstrate that all coverage and coding requirements are met.   
 
Physician/LCMPs should be aware that templates designed to gather selected information 
focused primarily for reimbursement purposes are often insufficient to demonstrate that 
all coverage and coding requirements are met.  This is often because these documents 
generally do not provide sufficient information to adequately show that the medical 
necessity criteria for the item/service are met.   
 
If a physician/LCMP chooses to use a template during the patient visit, CMS encourages 
them to select one that allows for a full and complete collection of information to 
demonstrate that the applicable coverage and coding criteria are met. 
 
Certificates of Medical Necessity (CMN), DME Information Forms (DIF), supplier 
prepared statements and physician attestations by themselves do NOT provide sufficient 
documentation of medical necessity, even if signed by the signed by the ordering 
physician..  See PIM 5.7 for additional information on documentation. 
 
C.  Financial Liability 
 
The physician/LCMP should be aware that inadequate medical record documentation can 
lead to a financial liability for the Beneficiary and/or Supplier, should the reviewer 
determine that a claim is not supported. 
 
In addition, the physician/LCMP should be aware that when ordering an item or service 
that will be furnished by another entity, Section 1842(p)(4) of the Social Security Act 
requires that adequate documentation supporting medical necessity be provided to the 
entity at the time that the item or service is ordered. Physicians/LCMPs who fail submit 
documentation upon a supplier's request may trigger increased MAC or RAC review of 
the physician/LCMP's evaluation and management services. 
 
3.3.2.1.2 DMEPOS Orders 
(Rev. 10190; Issued: 06-19-2020, Effective: 01-01-2020; Implementation: 07-01-
2020) 
 
Totality of the Record 
 
All DMEPOS items require a Standard Written Order (SWO) from the treating 
practitioner as a condition of payment. Medicare contractors shall consider the totality of 
the medical record when reviewing for compliance of the SWO elements. This will allow 
contractors to account for the dynamic nature of electronic medical record documentation 
systems, and give them additional discretion when they believe the entirety of the record 
demonstrates compliance with our order requirements. For example, a contractor may  nonetheless support payment when an order has a missing or flawed element that is 
clearly documented elsewhere in the record. 
 
Contractors acting as a secondary reviewer shall grant deference to the initial reviewers 
discretion, if such an initial decision resulted in a reasonably prudent decision that aligns 
with Medicare coverage and coding instructions. 
 
3.3.2.2 - Absolute Words and Prerequisite Therapies 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs, CERT, Recovery Auditors, and UPICs, as indicated. 
 
The MACs, CERT, Recovery Auditors, and UPICs shall not deviate from coverage 
provisions if absolute words such as never or only if are used when making claim 
determinations where a regulation, CMS ruling, NCD, LCD, or MAC policy article 
exists. In these cases, reviewers shall not make any exceptions or give individual 
consideration. 
 
Requirements for prerequisite therapies shall be followed when deciding whether to 
cover a service if listed in coverage provisions in interpretive manuals (e.g., 
conservative treatment has been tried, but failed). 
 
3.3.2.3 - Mandatory Policy Provisions 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs, Recovery Auditors, CERT and UPICs, as 
indicated. 
 
CERT contractors select claims for review on a random basis and do not select claims 
that are suspect. The CERT reviewers shall review every line on the randomly selected 
claim that affects payment to determine if the following types of requirements are met: 
 
  Coding requirements; 
  Benefit category requirements; 
  The reasonable and necessary requirements of the NCDs and 
LCDs, among others. 
 
The MACs and UPICs select claims to prevent or identify an improper payment. They 
are only required to review the suspect line and not every line on the selected claims. The 
selected line does not need to be completely reviewed. Along with reviewing the line for 
coding accuracy, the MACs should review for medical necessity if the provider has been 
notified that both types of review will occur. The UPICs shall use discretion in notifying 
the provider. 
 
3.3.2.4 - Signature Requirements 
(Rev. 11032; Issued: 09-30-21; Effective: 10-12-21; Implementation: 11-10-21)   
This section is applicable for Medicare Administrative Contractors (MACs), Unified 
Program Integrity Contractors (UPICs), Supplemental Medical Review Contractors 
(SMRCs), Comprehensive Error Rate Testing (CERT), and Recovery Audit Contractor 
(RACs), as indicated. 
 
For medical review purposes, Medicare requires that services provided/ordered/certified 
be authenticated by the persons responsible for the care of the beneficiary in accordance 
with Medicares policies. For example, if the physicians authenticated documentation 
corroborates the nurses unsigned note, and the physician was the responsible party per 
Medicares payment policy, medical reviewers would consider signature requirements to 
have been met. The method used shall be a handwritten or electronic signature. Stamped 
signatures are not acceptable. 
 
NOTE: Scribes are not providers of items or services. When a scribe is used by a 
provider in documenting medical record entries (e.g. progress notes), CMS does not 
require the scribe to sign/date the documentation. The treating physicians/non-physician 
practitioners (NPPs) signature on a note indicates that the physician/NPP affirms the 
note adequately documents the care provided. Reviewers are only required to look for the 
signature (and date) of the treating physician/non-physician practitioner on the note. 
 
Reviewers shall not deny claims for items or services because a scribe has not 
signed/dated a note. 
 
EXCEPTION 1: Facsimiles of original written or electronic signatures are acceptable for 
the certifications of terminal illness for hospice. 
 
EXCEPTION 2: There are some circumstances for which an order does not need to be 
signed. For example, orders for some clinical diagnostic tests are not required to be 
signed. The rules in 42 CFR 410 and Pub.100-02 chapter 15, Section 80.6.1 state that if 
the order for the clinical diagnostic test is unsigned, there must be medical documentation 
(e.g., a progress note) by the treating physician that he/she intended the clinical 
diagnostic test be performed. This documentation showing the intent that the test be 
performed must be authenticated by the author via a handwritten or electronic signature. 
 
EXCEPTION 3: Other regulations and the CMS instructions regarding conditions of 
payment related to signatures (such as timeliness standards for particular benefits) take 
precedence. For medical review purposes, if the relevant regulation, NCD, LCD and 
CMS manuals are silent on whether the signature needs to be legible or present and the 
signature is illegible/missing, the reviewer shall follow the guidelines listed below to 
discern the identity and credentials (e.g., MD, RN, etc.) of the signator. In cases where 
the relevant regulation, NCD, LCD and CMS manuals have specific signature 
requirements, those signature requirements take precedence. 
 
EXCEPTION 4: CMS would permit use of a rubber stamp for signature in accordance 
with the Rehabilitation Act of 1973 in the case of an author with a physical disability that  can provide proof to a CMS contractor of his/her inability to sign their signature due to 
their disability. By affixing the rubber stamp, the provider is certifying that they have 
reviewed the document. 
 
NOTE: Conditions of participation (COP) are not conditions of payment. 
 
If MAC and CERT reviewers find reasons for denial unrelated to signature requirements, 
the reviewer need not proceed to signature authentication. If the criteria in the relevant 
Medicare policy cannot be met but for a key piece of medical documentation that 
contains a missing or illegible signature, the reviewer shall proceed to the signature 
assessment. 
 
Providers should not add late signatures to the medical record, (beyond the short delay 
that occurs during the transcription process) but instead should make use of the signature 
authentication process. The signature authentication process described below should also 
be used for illegible signatures. 
 
A.  Handwritten Signature 
 
A handwritten signature is a mark or sign by an individual on a document signifying 
knowledge, approval, acceptance or obligation. 
 
  If the signature is illegible, MACs, UPICs, SMRC, and CERT shall 
consider evidence in a signature log, attestation statement, or other 
documentation submitted to determine the identity of the author of a 
medical record entry. 
 
  If the signature is missing from an order, MACs, UPICs, SMRC, and 
CERT shall disregard the order during the review of the claim (e.g., 
the reviewer will proceed as if the order was not received). 
 
  If the signature is missing from any other medical documentation 
(other than an order), MACs, UPICs, SMRC, and CERT shall accept a 
signature attestation from the author of the medical record entry. 
 
B.  Signature Log 
 
Providers will sometimes include a signature log in the documentation they submit that 
lists the typed or printed name of the author associated with initials or illegible signature. 
The signature log might be included on the actual page where the initials or illegible 
signature are used or might be a separate document. Reviewers should encourage 
providers to list their credentials in the log. However, reviewers shall not deny a claim for 
a signature log that is missing credentials. Reviewers shall consider all submitted 
signature logs regardless of the date they were created. Reviewers are encouraged to file 
signature logs in an easily accessible manner to minimize the cost of future reviews 
where the signature log may be needed again.   
C.  Signature Attestation Statement 
 
Providers will sometimes include an attestation statement in the documentation they 
submit. In order to be considered valid for Medicare medical review purposes, an 
attestation statement must be signed and dated by the author of the medical record entry 
and must contain sufficient information to identify the beneficiary. 
 
Should a provider choose to submit an attestation statement, they may choose to use the 
following statement: 
 
I, [print full name of the physician/practitioner], hereby attest that the medical record 
entry for _[date of service] accurately reflects signatures/notations that I made in my 
capacity as [insert provider credentials, e.g., M.D.] when I treated/diagnosed the above 
listed Medicare beneficiary. I do hereby attest that this information is true, accurate and 
complete to the best of my knowledge and I understand that any falsification, omission, 
or concealment of material fact may subject me to administrative, civil, or criminal 
liability. 
 
Although this format is acceptable, the CMS currently neither requires nor instructs 
providers to use a certain form or format. A general request for signature attestation shall 
be considered a non-standardized follow-up question from the contractors to the 
providers. However, since no form for signature attestation has been approved by the 
Office of Management and Budget (OMB), the contractors should not give the providers 
any standard format on which to submit the attestation. Once the OMB has assigned an 
OMB Paperwork Reduction Act number to this attestation form, its use will be 
mandatory. 
 
Note: The MACs and CERT shall NOT consider attestation statements where there is no 
associated medical record entry. Reviewers shall NOT consider attestation statements 
from someone other than the author of the medical record entry in question (even in cases 
where two individuals are in the same group, one should not sign for the other in medical 
record entries or attestation statements). Reviewers shall consider all attestations that 
meet the above requirements regardless of the date the attestation was created, except in 
those cases where the regulations or policy indicate that a signature must be in place prior 
to a given event or a given date. For example, if a policy states the physician must sign 
the plan of care before therapy begins, an attestation can be used to clarify the identity 
associated with an illegible signature. However, such attestation cannot be used to 
backdate the plan of care. 
 
D.  Signature Guidelines 
 
The guidelines below will assist in determining whether to consider the 
signature requirements met: 
 
  In the situations where the guidelines indicate signature  requirements met, the reviewer shall consider the entry. 
 
  In situations where the guidelines indicate contact billing provider 
and ask a non-standardized follow up question, the reviewer shall 
contact the person or organization that billed the claim and ask if the 
billing entity would like to submit an attestation statement or 
signature log within 20 calendar days. The 20 day timeframe begins 
on the date of the telephone contact with the provider or on the date 
the request letter is received by the provider. If the biller submits a 
signature log or attestation, the reviewer shall consider the contents of 
the medical record entry. 
 
  In cases where a reviewer has requested a signature attestation or log, 
the time for  completing the  review is  extended  by 15  days.  This 
extension starts upon receipt of the signature attestation or log. 
 
  The MACs, CERT and UPICs shall document all contacts with the 
provider and/or other efforts to authenticate the signature. 
 
Note: The MACs, CERT and UPICs shall NOT contact the biller when 
the claim should be denied for reasons unrelated to the signature 
requirement. 
 
 
 
 
    Contact billing 
  provider and ask 
Signature  a non- 
Requirement  standardized 
Met  follow up 
question 
1  Legible full signature  X   
2  Legible first initial and last name  X   
3  Illegible signature over a typed or printed name     
  X 
Example:   
John Whigg, MD  4  Illegible signature where the letterhead,     
addressograph or other information on the page   
indicates the identity of the signatory.  X 
 
Example: An illegible signature appears on a 
prescription.  The letterhead of the prescription lists 
(3) physicians names.  One of the names is circled. 
5  Illegible signature NOT over a typed/printed name     
and NOT on letterhead, but the submitted  X 
documentation is accompanied by: 
a signature log, or an attestation statement 
6  Illegible signature NOT over a typed/printed name,     
NOT on letterhead and the documentation is   
UNaccompanied by: 
a signature log, or  X 
an attestation statement 
 
Example: 
7  Initials over a typed or printed name  X   
8  Initials NOT over a typed/printed name but     
accompanied by: a  X 
signature log, or 
an attestation statement 
9  Initials NOT over a typed/printed name     
UNaccompanied by: a  X 
signature log, or 
an attestation statement 
10  Unsigned typed note with providers typed name    X 
  Example:       
John Whigg, MD 
11  Unsigned typed note without providers typed/printed    X 
name 
12  Unsigned handwritten note, the only entry on the    X 
page 
13  Unsigned handwritten note where other entries on the  X   
same page in the same handwriting are signed. 
14  signature on file    X 
 
E.  Electronic Signatures 
 
Providers using electronic systems need to recognize that there is a potential for misuse 
or abuse with alternate signature methods. For example, providers need a system and  software products that are protected against modification, etc., and should apply adequate 
administrative procedures that correspond to recognized standards and laws. The 
individual whose name is on the alternate signature method and the provider bear the 
responsibility for the authenticity of the information for which an attestation has been 
provided. Physicians are encouraged to check with their attorneys and malpractice 
insurers concerning the use of alternative signature methods. 
 
F.  Electronic Prescribing 
 
Electronic prescribing (e-prescribing) is the transmission of prescription or prescription- 
related information through electronic media. E-prescribing takes place between a 
prescriber and dispenser, pharmacy benefit manager (PBM), or health plan. It can take 
place directly or through an e-prescribing network. With e-prescribing, health care 
professionals can electronically transmit both new prescriptions and responses to renewal 
requests to a pharmacy without having to write or fax the prescription. E-prescribing can 
save time, enhance office and pharmacy productivity, and improve beneficiary safety and 
quality of care. 
 
A qualified e-prescribing system is one that meets the Medicare Part D requirements 
described in 42 CFR 423.160 (Standards for Electronic Prescribing). 
 
1.  E-Prescribing for Part B Medications (Other than Controlled Substances) 
 
The MAC, CERT and UPIC reviewers shall accept as a valid order any Part B 
medications, other than controlled substances, ordered through a qualified e-prescribing 
system. For Medicare Part B medical review purposes, a qualified e-prescribing system is 
one that meets all 42 CFR 423.160 requirements. When Part B medications have been 
ordered through a qualified e-prescribing system, the reviewer shall NOT require the 
provider to produce hardcopy pen and ink signatures as evidence of a medication order. 
 
2.  E-Prescribing for Part B Controlled Substance Medications 
 
Historically, the Drug Enforcement Agency (DEA) has not permitted the prescribing of 
controlled substance medications through e-prescribing systems. Therefore, when 
reviewing claims for controlled substance medications, MAC, CERT and UPICs 
reviewers shall only accept hardcopy pen and ink signatures as evidence of a medication 
order. However, the DEA is in the process of establishing requirements for electronic 
prescriptions for controlled substances. Refer to 21 CFR1300, 1304, 1306 and 1311 for 
further information. 
 
3.  E-Prescribing for Medications Incident to DME 
 
The MAC, CERT and UPICs reviewers shall accept as valid any e-prescribed order for 
medications incident to Durable Medical Equipment (DME), other than controlled 
substances. For the purpose of conducting Medicare medical review of medications 
incident to DME, a qualified e-prescribing system is one that meets all 42 CFR 423.160  requirements. When medications incident to DME have been ordered through a qualified 
e-prescribing system, the reviewer shall NOT require the provider to produce hardcopy 
pen and ink signatures as evidence of a medication order. 
 
G.  Additional Signature Requirements for Durable Medical Equipment, 
Prosthetics, Orthotics, & Supplies (DMEPOS) 
 
Refer to PIM chapter 5 for further details regarding additional signature requirements for 
DMEPOS. 
 
H.  Signature Dating Requirements 
 
For medical review purposes, if the relevant regulation, NCD, LCD and other CMS 
manuals are silent on whether the signature must be dated, the MACs, CERT and UPICs 
shall ensure that the documentation contains enough information for the reviewer to 
determine the date on which the service was performed/ ordered. 
 
Example: The claim selected for review is for a hospital visit on October 4. The ADR 
response is one page from the hospital medical record containing three (3) entries. The 
first entry is dated October 4 and is a physical therapy note. The second entry is a 
physician visit note that is undated. The third entry is a nursing note dated October 4. The 
reviewer should conclude that the physician visit was conducted on October 4. 
 
I.  Additional Documentation Request Language Regarding Signatures 
 
The CERT contractor shall use language in its ADR letters reminding providers that the 
provider may need to contact another entity to obtain the signed version of a document. 
For example, a hospital discharge summary in the physicians office files may be 
unsigned, whereas the version of the discharge summary in the hospital files should be 
signed and dated. MACs are encouraged to use such language in their letters. In addition, 
MACs, CERT and UPICs have the discretion to add language to their ADRs stating that 
the provider is encouraged to review their documentation prior to submission, to ensure 
that all services and orders are signed appropriately. In cases where a reviewer finds a 
note with a missing or illegible signature, the ADR may inform the provider that it should 
submit a signature log or signature attestation as part of the ADR response. 
 
The following is sample language that reviewers may choose to use in certain ADRs: 
 
Medicare requires that medical record entries for services provided/ordered be 
authenticated by the author. The method used shall be a handwritten or electronic 
signature. Stamp signatures are not acceptable. Beneficiary identification, date of service, 
and provider of the service should be clearly identified on the submitted documentation. 
 
The documentation you submit in response to this request should comply with these 
requirements. This may require you to contact the hospital or other facility where you  provided the service and obtain your signed progress notes, plan of care, discharge 
summary, etc. 
 
If you question the legibility of your signature, you may submit an attestation statement 
in your ADR response. 
 
If the signature requirements are not met, the reviewer will conduct the review without 
considering the documentation with the missing or illegible signature. This could lead the 
reviewer to determine that the medical necessity for the service billed has not been 
substantiated. 
 
J.  Potential Fraud Referrals 
 
At any time, suspected fraud shall result in a referral to the UPIC for development. If 
MAC, RAC, SMRC or CERT reviewers identify a pattern of missing/illegible signatures, 
the reviewer shall refer to the appropriate UPIC for further development. 
 
3.3.2.5 - Amendments, Corrections and Delayed Entries in Medical 
Documentation 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs, CERT, Recovery Auditors, SMRC and 
UPICs, as indicated. 
 
A.  Amendments, Corrections and Delayed Entries in Medical 
Documentation 
 
All services provided to beneficiaries are expected to be documented in the medical 
record at the time they are rendered. Occasionally, certain entries related to services 
provided are not properly documented.  In this event, the documentation will need to be 
amended, corrected, or entered after rendering the service. When making review 
determinations the MACs, CERT, Recovery Auditors, SMRC and UPICs shall consider 
all submitted entries that comply with the widely accepted Recordkeeping Principles 
described in section B below. The MACs, CERT, Recovery Auditors, SMRC and UPICs 
shall NOT consider any entries that do not comply with the principles listed in section B 
below, even if such exclusion would lead to a claim denial. For example, they shall not 
consider undated or unsigned entries handwritten in the margin of a document. Instead, 
they shall exclude these entries from consideration. 
 
B.  Recordkeeping Principles 
 
Regardless of whether a documentation submission originates from a paper record or an 
electronic health record, documents submitted to MACs, CERT, Recovery Auditors, 
SMRC and UPICs containing amendments, corrections or addenda must: 
 
1.  Clearly and permanently identify any amendment, correction or  delayed entry as such, and 
 
2.  Clearly indicate the date and author of any amendment, correction 
or delayed entry, and 
 
3.  Clearly identify all original content, without deletion. 
 
Paper Medical Records: When correcting a paper medical record, these principles are 
generally accomplished by: 
 
1.  Using a single line strike through so the original content is still 
readable, and 
 
2.  The author of the alteration must sign and date the revision. 
 
Amendments or delayed entries to paper records must be clearly signed and dated upon 
entry into the record. Amendments or delayed entries to paper records may be initialed 
and dated if the medical record contains evidence associating the providers initials with 
their name. For example, if the initials match the first and last name of the practitioner 
documented elsewhere in the medical records including typed or written identifying 
information, the reviewer shall accept the entry. 
 
Electronic Health Records (EHR): Medical record keeping within an EHR deserves 
special considerations; however, the principles specified above remain fundamental and 
necessary for document submission to MACs, CERT, Recovery Auditors, SMRC and 
UPICs. Records sourced from electronic systems containing amendments, corrections or 
delayed entries must: 
 
a.  Distinctly identify any amendment, correction or delayed entry; 
and 
b.  Provide a reliable means to clearly identify the original content, the 
modified content, and the date and authorship of each modification 
of the record. 
 
If the MACs, CERT, SMRC or Recovery Auditors identify medical documentation with 
potentially fraudulent entries, the reviewers shall refer the cases to the UPIC and may 
consider referring to the RO and State Agency. 
 
3.3.2.6 - Psychotherapy Notes 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs, CERT, Recovery Auditors or UPICs, as 
indicated. 
 
Psychotherapy notes are defined in 45 CFR164.501 as notes recorded by a mental 
health professional which document or analyze the contents of a counseling session and  that are separated from the rest of a medical record. The definition of psychotherapy 
notes excludes medication prescription and monitoring, counseling session start and stop 
times, the modalities and frequencies of administered treatment, results of clinical tests, 
and any summary of diagnosis, functional status, treatment plan, symptoms prognosis, 
ongoing progress and progress to date. This class of information does not qualify as 
psychotherapy note material. Physically integrating information excluded from the 
definition of psychotherapy notes and protected information into one document or record 
does not transform the non-protected information into protected psychotherapy notes. 
 
Under no circumstances shall the MACs, CERT, Recovery Auditors or UPICs request 
that a provider submit psychotherapy notes defined in 45 CFR 164.501. The refusal of a 
provider to submit such information shall not result in the automatic denial of a claim. 
 
If the medical documentation includes any of the information included in the definition of 
psychotherapy notes in 164.501, as stated above, the provider is responsible for 
extracting information required to support that the claim is for reasonable and necessary 
services. MACs, Recovery Auditors, CERT or UPICs shall review the claim using the 
supporting documentation submitted by the provider. If the provider does not submit 
information sufficient to demonstrate that services were medically necessary, the claim 
shall be denied. Beneficiaries cannot be held liable for these denials unless they received 
proper liability notification before services were rendered, as detailed in CMS Pub. IOM, 
100-04 chapter 30, 30.1. 
 
3.3.2.7 - Review Guidelines for Therapy Services 
(Rev. 377, Issued: 05-27-11, Effective: 06-28-11, Implementation: 06-28-11) 
 
This section applies to MACs. 
 
Financial limitations on therapy services (therapy caps) were originally initiated by the 
Balanced Budget Act of 1997 and have been implemented at times without an exceptions 
process.  During a time when no exceptions process exists, contractors shall deny claims 
for Part B occupational, physical, and speech-language pathology therapy services, 
except for hospital outpatient therapy services, which exceed the therapy cap.  There is no 
therapy cap for hospital outpatient therapy services. 
 
Automatic Process for Exception from the Therapy Cap 
 
Section 1833(g)(5) of the Social Security Act provides that contractors shall, at the 
request of the individual enrolled under the Part B benefit or a person acting on behalf of 
that individual, grant an exception to the therapy cap in certain circumstances. 
 
For therapy services provided during a time when a therapy cap exceptions process is in 
effect, the contractor shall presume the beneficiary to be excepted from the therapy cap 
without submission of request for exception or supporting documentation if: 
    The beneficiary meets specific conditions listed in CMS Pub.100-04, 
chapter 5, 10.2 for exception from the therapy cap, or 
 
  The beneficiary does not meet the specific criteria in CMS Pub.100-04, 
chapter 5, 10.2, but has a need for medically necessary therapy services above the 
therapy cap. 
 
In both of these situations, the contractor shall require that the therapist maintain on file, 
necessary documentation to support the medical necessity of therapy services. 
Documentation requirements are found in CMS Pub.100-02, chapter 15, section 230.3. 
 
Request for Exception from Therapy Caps 
 
Contractors shall not require providers to submit written requests for exception from the 
therapy cap.  Instead, the placement of the KX modifier on the claim shall be interpreted 
as a request for exception from the cap.  For beneficiaries who the clinician believes will 
require therapy treatment days in excess of those payable under the therapy cap, and who 
meet the above bulleted criteria for automatic exception, the Medicare contractor shall 
require the provider to maintain sufficient documentation on file to support the medical 
necessity for this service.   Use of the KX modifier shall be interpreted as the therapists 
attestation that services provided above the cap are medically necessary. 
 
The contractor shall require the provider to maintain on file documentation in accordance 
with CMS Pub.100-02, chapter 15, section 220.3 and CMS Pub.100-04, chapter 5, 
sections 10.2 and 20 with the request for treatment days in excess of those payable under 
the therapy cap. 
 
If the clinician attests that the requested services are medically necessary by using a KX 
modifier on the claim line, the contractor may make the determination that the claim is 
medically necessary.  That determination is binding on the contractor in the absence of: 
 
  potential fraud; or  
  evidence of misrepresentation of facts presented to the contractor, or  
  A pattern of aberrant billing by a provider. 
 
Should such evidence of potential fraud, misrepresentation, or aberrant billing patterns by 
a provider be found, claims are subject to medical review regardless of whether the KX 
modifier was used on the claim. 
 
Progressive corrective action (PCA) and medical review have a role in the therapy 
exception process. Although the services may meet the criteria for exception from the cap 
due to condition or complexity, they are still subject to review to determine that the 
services are otherwise covered and appropriately provided.  The exception is granted on 
the clinicians assertion that there is documentation in the record justifying that the 
services meet the criteria for reasonable and necessary services.  For example, the 
documentation must accurately represent the facts, and there shall be no evidence of  patterns of aberrant billing of the services by the provider/supplier.  Services deemed 
medically necessary are still subject to review related to fraud or abuse. An example of 
inappropriate use of the process is the routine use of the KX modifier on every claim for 
a patient that has an excepted condition or complexity, regardless of the impact of the 
condition on the need for services above the cap. 
 
3.3.2.8 - MAC Articles 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs. 
 
A. General 
 
The MACs have the discretion to publish articles communicating certain information to 
providers, such as any newly developed educational materials, coding instructions or 
clarification of existing medical review related billing or claims policy. The MACs are 
required to enter articles that address LCDs, coding or medical review-related billing and 
claims considerations into the Medicare Coverage Database (MCD). 
 
For the purposes of this manual, the term "publish" will be used to describe any form of 
dissemination including posting on a Web site, distributing at a seminar, e-mailing, or 
printing in a hardcopy bulletin. The MAC Medical Review Departments are responsible 
for the development of articles associated with new or revised LCDs and for entering 
those articles into the Medicare Coverage Database. Other widespread educational 
articles shall not be charged to MR. 
 
The MAC medical review departments shall send articles to the appropriate department 
within the MAC for publishing. All newly created articles shall be posted on the MAC's 
Web site where duplicate copies can be obtained by providers/suppliers. 
 
When NCDs or other coverage instructions issued by the CMS include specific 
conditions or parameters for covered services, the MACs have the discretion to develop 
and publish a list of covered codes associated with the coverage provision. MACs have 
the discretion to automate denials for codes not included on the list without the 
development of a LCD if the NCD indicates or states that no other condition or 
parameters will be covered. 
 
MACs also have the discretion to: 
 
  Publish definitions of procedure codes, lists of items that may be 
billed  under  a  particular  code,  or  minimum  requirements  that 
providers must meet in order to bill using a certain code. 
 
  Publish a product classification list that instructs providers about 
which specific products meet the definitional requirements of a 
particular HCPCS code. Developing or revising an LCD for this  article is unnecessary. 
 
  Explain which off-labeled uses of the Food and Drug 
Administration (FDA) approved drugs are considered reasonable 
and necessary within the diagnosis codes that reflect such uses. 
 
  Explain the benefit category decisions and publish a list of 
drugs/biologicals that are considered usually self-administered. 
MACs should enter their self- administered medication exclusion 
list into the Medicare Coverage Database. This database can be 
accessed at www.cms.gov/mcd. 
 
  MACs have the discretion to explain which HCPCS code or group 
of codes properly describes a particular service. 
 
  MACs have the discretion to publish State non-physician licensure 
information that governs services billed by the physician under the 
"incident to" provision. 
 
The MACs shall ensure that articles do not conflict with NCDs, LCDs, policy, or 
coverage provisions in interpretive manuals. Although a comment and notice process is 
not required, MACs are encouraged to consult with stakeholders in the provider 
community when developing articles. MACs shall monitor comments about articles from 
clinician providers and respond to their concerns, as needed, by issuing revised or 
clarifying articles. 
 
NOTE: Nothing in this section precludes the MACs or UPICs from making individual 
claim determinations, even in the absence of an article or LCD. 
 
3.3.3 - Reviewing Claims in the Absence of Policies and Guidelines 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
The MACs, CERT, Recovery Auditors, and UPICs have the discretion to review claims, 
in the absence of polices, whether a NCD, coverage provision in an interpretive Medicare 
manual, or LCD exists for that service. When making individual claim determinations, 
they shall determine that the service in question is covered based on whether the service 
meets all of the conditions listed in section 3.6.2.1. 
 
3.4 - Prepayment Review of Claims 
(Rev.902, Issued: 09-27-19, Effective: 10-28-19, Implementation: 10-28-19) 
 
This section applies to MACs and UPICs. 
 
A. General 
  Non-random (targeted) review is defined as review conducted with a specific reason or 
logic to substantiate the cause for review. MACs are encouraged to initiate non-random 
service-specific prepayment review to prevent improper payments for services identified 
by CERT or Recovery Auditors or other sources.  
 
The MACs shall initiate targeted provider-specific prepayment review only when there is 
the likelihood of a sustained or high level of improper payments. 
 
B. 100% Prepayment Review and Random Review Instructions 
 
Section 1302 of the Health Care and Education Reconciliation Act (HCERA) repealed 
section 1874A (h) of the Social Security Act which had placed restrictions on prepayment 
medical review. CMS review contractors shall comply with Section 1 random review and 
Section 2 100% prepayment review. 
 
1. Random Review 
 
Random review is defined as review conducted without a specific reason or logic to 
substantiate the cause for review. MACs have the discretion to conduct random reviews 
of services; however, CMS does not recommend random reviews. MACs shall notify the 
CMS Contracting Officers Representative (COR), Regional Office Technical Monitor 
(TM), and Business Function Lead (BFL) of its intent to conduct random review. The 
MAC shall describe what the intended result of the random review will be, an estimate of 
the number of claims to be reviewed randomly and the rationale as to why random review 
would be more effective than targeted review. 
 
2. 100% Prepayment Review 
 
100% prepayment review is defined as review of every claim submitted by a targeted 
provider for a specific code (i.e., DRG, CPT, HCPCs). 100% prepayment review also 
includes review of every claim submitted by the targeted provider. 
 
MACs have the discretion to conduct 100 % prepayment review of providers. CMS 
considers 100 % prepayment review to be appropriate when a provider has a prolonged 
time period of non-compliance with CMS policies. Any MAC that plans to conduct 100 
% prepayment review shall inform the CMS COR, Regional Office TM, and BFL in 
advance about any provider being placed on 100 % prepayment review. In addition, the 
MAC shall provide 
 
  The background information on attempts to educate the provider. 
 
  The historical improper payment rate of the provider before beginning 100% 
prepayment review. 
 
  The length of time the provider is expected to be on 100 % prepayment reviews. 
    The estimated number of claims and the dollar value of claims expected to be 
reviewed per month. 
 
  The criteria for removing the provider from 100 % prepayment review. 
 
3.  UPIC Initiated Prepayment Reviews 
 
No UPIC shall initiate a 100% prepayment review without CMS approval, except 100% 
prepayment reviews associated with a Payment Suspension. Therefore, the UPIC shall 
provide its COR and IAG BFL a summary of the investigation, any prior history (if 
applicable) with the provider/supplier in question, and any other relevant information in a 
format agreed upon by the COR and IAG BFL.  
 
If the COR and IAG BFL agree that 100% prepayment review is appropriate, the UPIC 
shall include the case on the next case coordination meeting agenda for discussion and 
final approval. During the case coordination meeting, the UPIC may receive additional 
guidance from CMS related to subsequent actions related to these investigations.  If the 
UPIC has subsequent questions following the case coordination meeting, the UPIC shall 
coordinate with its COR and IAG BFL. 
 
3.4.1 - Electronic and Paper Claims 
(Rev. 721; Issued: 06-09-17; Effective: 07-11-17; Implementation: 07-11-17) 
 
This section applies to MACs. 
 
The Administrative Simplification Compliance Act (ASCA, Section 3 of Pub. L, 107-
105, 42 CFR 424.32) requires that all Medicare claims be submitted electronically using 
the ASC X12 837 institutional or professional claim formats with few exceptions.  MACs 
shall not require providers to submit paper claims when they are targeted for prepayment 
medical record review.  The MACs shall allow providers that qualify for an ASCA 
mandatory electronic billing exception to submit paper claims when they are targeted for 
prepayment review (See IOM Pub.100-04, chapter 24, 90 for exceptions). 
 
3.4.1.1 - Linking LCD and NCD ID Numbers to Edits 
(Rev. 377, Issued: 05-27-11, Effective: 06-28-11, Implementation: 06-28-11) 
 
The MACs shall ensure that any edit that could result in a denial based on a LCD or NCD 
includes the LCD or NCD ID number(s) associated with the denial. The MACs shall 
ensure that any edit that could result in a denial based on a lab negotiated NCD includes 
the NCD ID number(s) associated with the denial. 
 
3.4.1.2 - Not Otherwise Classified (NOC) Codes 
(Rev. 377, Issued: 05-27-11, Effective: 06-28-11, Implementation: 06-28-11) 
 
This section applies to MACs. 
  The MAC MR staff should assist claims processing staff in making coverage and pricing 
determinations on NOC HCPCS/CPT codes. The claims processing staff will need 
information from the MR staff so that they can price the service in accordance with CMS 
pricing methodologies described in the Claims Processing Manual (IOM Pub. 100-04).  
MACs shall keep track of pricing determinations for frequently billed services so that the 
claims processing staff can price future claims using established MR pricing guidelines 
for that service. 
 
3.4.1.3 - Diagnosis Code Requirements 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs and UPICs, as indicated. 
 
ICD-10-CM is used for diagnoses on inpatient discharges and for other services provided 
on and after the implementation of ICD-10-CM. ICD-9-CM is used for discharges and 
other services before the implementation of ICD-10-CM. 
 
Section 1833(e) of the Act states that no payment should be made under this part unless 
there has been furnished such information as may be necessary in order to determine the 
amounts due such provider or other person.... MACs and UPICs should require 
submission of information, in accordance with the requirements below, that they deem 
necessary to make a claim determination and determine appropriate payment. Some 
provider types are required to submit diagnosis codes on all claims while other provider 
types are required to submit diagnosis codes only if such information is required by a 
LCD. 
 
A. Claims Submitted by Physicians or Certain Non-Physician 
Practitioners Must Contain Diagnosis Codes. 
 
Section 1842 (p) (1) of the Act states that for each claim submitted by physicians or 
certain non-physician practitioners (defined in 1842(b) (18) (C) of the Act) shall include 
the appropriate diagnosis code (or codes).... For claims submitted with invalid, 
truncated, or missing diagnosis codes, MACs and UPICs shall classify the claim as 
rejected as unprocessable within the MCS. See the Claims Processing Manuals IOM 
Pub.100-04. 
 
B. Claims Submitted by All Other Provider Types Must Contain 
Diagnosis Codes if required by a LCD 
 
During a service-specific review to address potential abuse or overutilization, MACs and 
UPICs should require that diagnosis codes be submitted with each claim for the targeted 
service. The diagnosis information is used to determine if the services are covered and 
correctly coded. MACs and UPICs should require that ICD diagnosis codes be submitted 
by all non-physician billers with every claim for a targeted service only if such a 
requirement appears in a LCD for that service. This outreach shall occur via Web site, 
bulletin articles, etc.   
For provider-specific reviews, MACs and UPICs have the discretion to require 
submission of diagnosis codes to support that the reasonable and necessary criteria has 
been met on all claims submitted by individual non-physician providers who have been 
targeted because of unusual billing practices, fraud referrals, etc., even if no LCD exists 
requiring such codes. For claims submitted with invalid, truncated, or missing diagnosis 
codes, reviewers shall classify the claim as unable to be processed, and return the claim 
to the provider (RTP). See the Claims Processing Manual IOM Pub.100-04. 
 
C.  Requirements for Lab Claims 
 
The American Medical Associations (AMA) 1998 edition of the Current Procedural 
Terminology (CPT) established three new and one revised Organ and Disease Oriented 
laboratory panels. Since these panels are composed of clinically relevant groupings of 
automated multichannel tests there is a general presumption of medical necessity.  If 
there is data or reason to suspect abuse of the panel codes, contractors may review these 
claims. Should contractors determine the need to develop a LCD for laboratory panel 
codes the MAC shall develop these policies at the panel code level. In some instances of 
perceived abuse of the panel codes, the contractors may review the panel and deny 
component tests on a case-by-case basis or evaluate the need for the component level test. 
 
3.4.1.4 - Prepayment Review of Claims Involving Utilization Parameters 
(Rev. 721; Issued: 06-09-17; Effective: 07-11-17; Implementation: 07-11-17) 
 
This section applies to MACs. 
 
A.  For Non-lab Claims 
 
The MACs shall implement prepayment edits that will prevent payment to providers who 
have a pattern of billing for items or services that are not covered, incorrectly coded or 
inappropriately billed. The MACs shall respond quickly when they identify providers 
who seem to have egregious overutilization of a non-lab item or service and who bill for 
egregious amounts. The identification of, and response to these providers shall be within 
the context of the MACs MR Strategy and prioritization of review targets. 
 
B.  Utilization Denials 
 
The MACs have the discretion to establish edits to automatically deny services when 
overutilization of a non-lab service is identified and clear policy serves as the basis for 
denial. 
 
The MACs shall establish medical record review edits and make individual claim 
determinations when overutilization of a non-lab service is identified and there is not 
clear policy to serve as the basis for denial. 
  The MACs shall establish medical record review edits that do not involve utilization 
parameters and make individual claim determinations when overutilization of a lab 
service is identified and there is no clear policy to serve as the basis for denial.  For 
example, if the problem is limited to a few laboratory providers, the MAC could develop 
a provider-specific prepayment edit to suspend payment for all of the lab services in 
question from the problem providers.  If the problem is widespread, the MAC could 
develop a service-specific edit to suspend payment for all of the lab services in question 
or all of the services in question for a particular diagnosis or revenue code. Based on data 
analysis within each MAC jurisdiction, the MACs shall focus the edit by provider, 
diagnosis, procedure code, or in any other way except by use of a utilization parameter. 
 
3.4.1.5 - Prepayment Review Edits 
(Rev. 377, Issued: 05-27-11, Effective: 06-28-11, Implementation: 06-28-11) 
 
This section applies to MACs. 
 
A.  Automated Edits 
Automated prepayment edits, designed by MAC staff, are put in place to prevent 
payment for non-covered, incorrectly coded, or inappropriately billed services. Most 
automated payment edits will be service-specific.  The MAC will rarely install a 
provider-specific automated prepayment edit. 
B.  Limits on Automated Prepayment Review 
 
The MACs shall not install edits that result in the automatic denial of payment for items 
or services based solely on the diagnosis of a progressively debilitating disease when 
treatment may be reasonable and necessary.  The appearance of a progressively 
debilitating disease on a claim or history does not permit automated denials that presume 
a stage of that disease that negates the effectiveness of treatment.  Likewise, when a 
beneficiary with a progressively debilitating disease experiences an illness or injury 
unrelated to his or her progressively debilitating disease, the provider should submit a 
claim with a primary diagnosis that most accurately reflects the need for the provided 
item or service. For instance, a claim for treatment for an acute urinary tract infection 
cannot be denied by automatic edit just because the beneficiary has a diagnosis of 
multiple sclerosis. 
 
3.4.2  Prepayment Medical Record Review Edits 
(Rev. 721; Issued: 06-09-17; Effective: 07-11-17; Implementation: 07-11-17) 
 
This section applies to MACs. 
 
The MACs shall focus prepayment medical record review edits to suspend only claims 
with a high probability of aberrant billing practices.  Focused edits reduce provider 
burdens and increase the efficiency of MR activities.  The MACs shall ensure that edits 
are specific enough to identify only the services that they determine to be questionable  based on data analysis.  MACs are encouraged to ensure that most MR edits are located 
in the table driven portion of the system and are not hard coded. It is important to have 
the flexibility to modify MR edits based on workload demands and changes in provider 
behavior. 
 
The MACs have the discretion to establish prepayment medical record review edits that 
are either service-specific or provider-specific.  Provider-specific edits can suspend all 
claims from a particular provider or focus on selected service(s), place of service, or other 
parameters. 
 
3.5 - Postpayment Medical Record Review of Claims 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
The MACs shall initiate targeted provider-specific or service-specific postpayment 
medical record review only when there is the likelihood of a sustained or high level of 
payment error. RACs, UPICs, and SMRC shall perform postpay review of claims as 
outlined in their SOW. 
 
3.5.1 - Re-opening Claims 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs, CERT, RACs, SMRC and UPICs, as 
indicated. 
 
The MACs, CERT, RACs, SMRC, and UPICs shall adhere to the rules found in CFR 
405.980 through 986 when conducting automated or postpayment medical record 
reviews. High error rate and/or potential overutilization, identified by data analysis, are 
reasons to perform postpayment review and represent sufficient cause to reopen claims in 
accordance with 42 CFR 405.986. See Pub. 100-04, chapter 34 for more information on 
good cause for reopening. 
 
3.5.2 - Case Selection 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs, CERT, SMRC, and UPICs, as indicated.  
 
Case review and development provisions: 
 
The MACs and the SMRC shall not perform postpayment review of unassigned claims. A 
claim submitted for a service or supply by a provider who has not accepted the Medicare 
fee schedule is an unassigned claim. 
 
  The MACs, SMRC, and UPICs have the discretion to select cases 
for postpayment review on a claim-by-claim basis or use statistical 
sampling for overpayment estimation. 
    When MACs, SMRC, and UPICs conduct claim-by-claim 
o
postpayment review, they shall only collect or refund the 
actual overpayment or underpayment amount. 
 
  When MACs, SMRC, and UPICs conduct statistical 
o
sampling for overpayment estimation as specified in PIM 
chapter 8, they shall extrapolate the sampling results to the 
known universe of similar claims when calculating the 
projected overpayment or underpayment amount. 
 
  The MACs, RACs, SMRC, and UPICs have the discretion to 
conduct the postpayment review onsite at the provider or suppliers 
location. 
 
  MAC staff shall review their provider tracking system, using RAC 
Data Warehouse (RACDW) data, and consult with the UPICs to 
ensure non- duplication during the process of selecting providers 
for postpayment review. 
 
  To prevent duplicate claim reviews, the MACs, SMRC, and RACs 
shall use the RACDW to identify, and exclude from review, claims 
that were previously reviewed, or that are under current review, by 
another contractor. 
 
  CERT shall duplicate another contractors review, when 
appropriate, if those claims are chosen as part of a statistically 
valid random sample to measure the improper payment rate. 
 
  This instruction does not prevent the UPICs from reviewing a claim 
that has been reviewed by another contractor in order to support their 
case development or other administrative action. 
 
  When the MACs, CERT, RACs, SMRC and UPICs choose to send 
the provider an ADR for a postpayment review, they shall do so in 
accordance with PIM chapter 3, 3.2.3.2. The contractors may 
grant an extension of the submission timeframes at their discretion 
or in accordance with their SOWs. 
 
  The MACs, CERT, RACs, SMRC and UPICs make coverage, 
coding, and/or other determinations when re-adjudicating claims. 
 
  The MACs, CERT, RACs, SMRC and UPICs shall document all 
incorrectly paid, denied, or under-coded (e.g., billed using a 
procedure/supply or other code that is lower than what is supported 
by medical documentation) items or services. 
    Services newly denied as a result of re-adjudication shall be 
reported as positive values. 
 
  Services that were denied, but are reinstated as a result of re-
adjudication shall be reported as negative values. 
 
  The MACs, CERT, RACs, SMRC and UPICs shall document the 
rationale for denial and include the basis for revisions in each case 
(important for provider appeals). MACs, CERT, and UPICs should 
include copies of the NCD, coverage provisions from interpretive 
manuals, or LCD and any applicable references needed to support 
individual case determinations. RACs and the SMRC shall include 
detailed rationale as outlined in their SOWs. 
 
  The MACs have the discretion to deny payment without the review 
of the claim with a medically unlikely service edit. 
 
3.5.3 - CMS Mandated Edits 
(Rev. 721; Issued: 06-09-17; Effective: 07-11-17; Implementation: 07-11-17) 
 
In past years, CMS created mandated edits that suspend certain claims for medical review 
coverage and coding review.  However, more recently, CMS has given the contractors the 
discretion to prioritize workload to effectively lower the error rate.  CMS is now in the 
process of removing such mandated coverage and coding review edits from CWF, pricer, 
grouper, fee schedules, etc. 
 
Contractors may override CMS mandated edits that suspend for medical review coverage 
and coding review without performing review if one or more of the following conditions 
apply: 
 
1.  The contractor does not have MR responsibility for the claim, or 
   
2.  The contractor's data analysis/priority setting/ MR strategy does not indicate this 
service is a problem in their jurisdiction, or 
 
3.  It is not a skilled nursing facility (excluding swing beds) or a home health demand 
bill (these demand bills must be reviewed). 
 
3.5.4 - Tracking Medicare Contractors' Prepayment and Postpayment 
Reviews 
(Rev. 11933; Issued: 03-30-23; Effective: 04-01-23; Implementation: 04-03-23) 
 
Shared System Maintainers shall create a pre-payment claim file that is automatically 
uploaded to the RACDW by the VDC. Medicare Administrative Contractors (MACs) 
shall input all postpayment complex reviews into the Recovery Audit Data Warehouse.  
All claims chosen for review by the MAC where an additional documentation request  letter was issued to the provider before or after payment was made shall be included.  
MACs shall include all reviews, even those that did not result in an improper payment.  
 
Claims may be manually uploaded into the data warehouse or submitted by flat file. The 
Shared System Maintainers and MACs shall use the file layout provided by CMS for 
claims uploaded to the Recovery Audit Data Warehouse. Postpayment claims shall be 
submitted to the Recovery Audit Data Warehouse by the 20th day of every month for the 
previous month. Prepayment claims shall be submitted to the Recovery Audit Data 
Warehouse daily. 
 
MAC staff who need access to the Data Warehouse shall contact RAC@cms.hhs.gov. 
 
3.6 - Determinations Made During Review 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs, CERT, Recovery Auditors, and UPICs, as 
indicated. 
 
A.  General 
 
The MACs, CERT, Recovery Auditors, and UPICs shall be able to differentiate the type 
of determination made, ensuring that limitation of liability determinations are 
appropriate. 
 
When the MAC determines, through prepayment data analysis or postpayment review, 
that an inappropriate claim has been submitted; or the Recovery Auditor determines, in 
post-payment review, that an improper payment has been made, the MAC and Recovery 
Auditor shall verify that the error represents an unacceptable practice and not just an 
explainable aberrancy. Some legitimate reasons for anomalous data include: 
 
  The provider may be associated with a medical school, research 
center, or may be a highly specialized facility, for instance, the 
facility may be a Medicare- dependant hospital or CAH, which 
might skew the type of claims submitted; or 
 
  The community in which the provider practices may have special 
characteristics such as socio-economic level or a concentration of a 
specific age group that leads to an apparent aberrancy in the use of 
certain services. 
 
The MACs, CERT, Recovery Auditors, and UPICs have the discretion to make other 
determinations during the review of a claim to avoid or identify improper payments for 
such things as duplicate claims, etc. Other examples are listed below: 
 
Example 1: A Medicare policy states that when three (3) procedures are performed 
during the same operative session, Medicare pays 100 percent for the first, 50 percent for  the second and 25 percent for the third. A claim is identified where all three (3) 
procedures were paid at 100 percent. 
 
Example 2: A claim was paid using the fee schedule from the prior year. 
 
Example 3: A Medicare payment policy states that in order to pay for a capped rental 
item, consideration shall be given to whether the item was in continuous use by the 
beneficiary for a specified time period. A claim is found to have been paid out of 
compliance with this policy provision. 
 
If, at any time, the medical review detects potential fraud, MACs, CERT, and Recovery 
Auditors, shall refer the issue to the appropriate UPIC. 
 
3.6.1 - Determining Overpayments and Underpayments 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs, and UPICs. It does not apply to CERT or 
Recovery Auditors. 
 
A.  General 
 
The results of the re-adjudication are used to determine the overpayment or 
underpayment amount for each claim. Re-adjudicating claims may not result in a 
payment correction. Where statistical sampling for overpayment estimation is used, refer 
to instructions in the PIM chapter 8, 8.4 and to Exhibits 9, 10, 11 and 12 for projection 
methodologies based on FFS claims. For claims paid under PPS rules, MACs and UPICs 
shall develop projection methodologies in conjunction with their statisticians that are 
consistent with the requirements found in PIM chapter 8, 8.4. MACs and UPICs shall 
net out the dollar amount of services underpaid during the cost accounting period, 
meaning that amounts owed to providers are balanced against amounts owed from 
providers. 
 
Amounts of the following overpayments are to be included in each provider's or 
suppliers estimate for the reviewed sample: 
 
  According to the provisions of 1879 of the Act, the provider or 
supplier is liable for the overpayment of initially paid claims that 
were later denied on re- adjudication if : 
 
  (1)  The basis for denial is by reason of 1862(a) (l) or (9) of the 
Act 
 
  (2)  The provider or supplier knew or could reasonably have been 
expected to know that the items or services were excluded 
from coverage, and 
    For denials of non-assigned claims make a1842(l) determination 
on denials for 
1862(a)(1) 
 
  The provider or supplier was not without fault for the overpayment 
as defined in 
1870 of the Act. 
 
For appeal purposes, overpayment estimations applicable under 1879 of the Act will be 
identified separately from denials in which 1879 of the Act does not apply. Where both 
types of denials occur in the sample, MACs and UPICs calculate and document separate 
under/overpayments for each type of denial. For recovery purposes, however, both denial 
results are combined. 
 
3.6.2 - Verifying Errors 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs, CERT, and UPICs, as indicated. 
 
Understanding the characteristics of the service area of the provider is a key element of 
claim data analysis. The areas selected for review by the contractor (e.g., providers, 
services) must be deemed high priority and contractors must be able to document the 
rationale for selection. 
 
3.6.2.1 - Coverage Determinations 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
The MACs, CERT, Recovery Auditors, and UPICs shall deny an item or service if it does 
not meet any of the conditions listed below: 
 
  The item or service does not fall into a Medicare benefit category. 
 
  The item or service is statutorily excluded on grounds other than 
1862(a) (1) (A) of the Act. 
 
  The item or service is not reasonable and necessary under 1862(a) 
(1) (A) of the Act. 
 
  The item or service does not meet other Medicare program 
requirements for payment. 
 
3.6.2.2 - Reasonable and Necessary Criteria 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs, CERT, Recovery Auditors, and UPICs, as 
indicated.   
CMS issues national coverage determinations (NCDs) that specify whether certain items, 
services, procedures or technologies are reasonable and necessary under 1862(a) (1) (A) 
of the Act. In the absence of an NCD, Medicare contractors are responsible for 
determining whether services are reasonable and necessary. If no local coverage 
determination (LCD) exists for a particular item or service, the MACs, CERT, Recovery 
Auditors, and UPICs shall consider an item or service to be reasonable and necessary if 
the item or service meets the following criteria: 
 
  It is safe and effective; 
 
  It is not experimental or investigational; and 
 
  It is appropriate, including the duration and frequency in terms of 
whether the service or item is: 
 
  Furnished in accordance with accepted standards of medical 
o
practice for the diagnosis or treatment of the beneficiary's 
condition or to improve the function of a malformed body 
member; 
 
  Furnished in a setting appropriate to the beneficiary's medical 
o
needs and condition; 
 
  Ordered and furnished by qualified personnel; and, 
o
 
  One that meets, but does not exceed, the beneficiary's medical 
o
need. 
 
There are several exceptions to the requirement that a service be reasonable and 
necessary for diagnosis or treatment of illness or injury in order to be considered for 
payment. The exceptions appear in the full text of 1862(a) (l) (A) of the Act. See also 
PIM chapters 13, 5.1 and 7.1. 
 
3.6.2.3 - Limitation of Liability Determinations 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs, CERT, Recovery Auditors, and UPICs, as 
indicated. 
 
Section 1879(a)-(g) of the Act limits the financial liability of beneficiaries, providers, and 
suppliers by permitting Medicare payments, or requiring refunds, for certain services and 
items for which Medicare payment would otherwise be denied. The purpose of this 
provision is to protect beneficiaries from liability in certain cases of denied services. The 
limitation of liability provisions apply only to claims for services not statutorily excluded, 
that are denied for the following reasons:   
  The service or item did not meet the reasonable and necessary 
criteria; 
 
  The beneficiary or provider did not know, or could not have been 
reasonably expected to know that the service or item would not be 
covered; and 
 
  The beneficiary receives certain screening tests and preventive 
services in excess of the guidelines. 
 
(See IOM Pub. 100-04, chapter30, 20 for more information). 
 
The MACs, CERT, and UPICs shall first examine benefit categories and statutory 
exclusions to determine if a service or item is covered. Recovery Auditors shall examine 
categories and exclusions as outlined in their SOW. If the item or service meets the 
requirements of the appropriate benefit category and is not excluded by statute, the next 
consideration is whether the service was reasonable and necessary. When a claim is 
denied, in full or in part, because an item or service is not reasonable and necessary, 
MACs, CERT, Recovery Auditors, and UPICs shall make and document determinations 
as appropriate to 1879, 1870, and 1842(l) of the Act. Because the determinations can 
be appealed, it is important that the rationale for the determination be documented 
initially and at each level of appeal. 
 
Limitations of liability provisions do not apply if there is a statutory exclusion, even if the 
service meets the reasonable and necessary criteria. 
 
3.6.2.4 - Coding Determinations 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs, CERT, SMRC, Recovery Auditors, and 
UPICs, as indicated. 
 
ICD-10-CM is used for diagnoses on inpatient discharges and for other services provided 
on and after the implementation of ICD-10-CM.. ICD-9-CM is used for discharges and 
other services before that date. 
 
The MACs, CERT, SMRC, Recovery Auditors, and UPICs shall determine that an 
item/service is correctly coded when it meets all the coding guidelines listed in the 
Current Procedural Terminology-4 (CPT-4), Coding Clinic for ICD, Coding Clinic for 
HCPCS, and any coding requirements listed in CMS manuals or MAC articles. 
 
In certain situations, it is appropriate for contractors to up code or down code a claim (or 
items or services on a claim) and adjust the payment. When the medical record supports a 
higher or lower level code, the MACs, SMRC, CERT, UPICs and Recovery Auditors 
shall not deny the entire claim but instead shall adjust the code and adjust the payment.   
The MACs, SMRC, CERT, UPICs and Recovery Auditors shall up code or down code 
when it is possible to pay for the item or service actually provided without making a 
reasonable and necessary determination or if otherwise specified in applicable CMS 
medical review instructions. The MACs, SMRC, CERT, UPICs and Recovery Auditors 
shall not substitute the payment amount of one item or service for a different item or 
service based on a reasonable and necessary determination. 
 
Example situations where it is appropriate to up code or down code a claim 
are: 
 
1.  CBC with diff was ordered and billed but CBC without diff was 
provided; 
 
2.  X-ray with contrast was ordered and billed but X-ray without 
contrast was provided; 
 
3.  E&M level 3 was billed but the medical record supports level 2 (or 
other level); 
 
4.  PPS (DRG/RUG/HHRG) code was billed but the medical records 
supports a different code; and 
 
5.  Quantity of diabetic test strips exceeds limits; for example, quantity 
was provided for insulin treated but the patient was not insulin 
treated. 
 
3.6.2.5 - Denial Types 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-
27-20) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a 
beneficiary's Medicare identification number. For purposes of this manual, Medicare 
beneficiary identifier references both the Health Insurance Claim Number (HICN) and 
the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition 
period and after for certain business areas that will continue to use the HICN as part of 
their processes. 
 
This section applies to MACs, CERT, RACs, and UPICs, as indicated. 
 
A. Distinguishing Between Benefit Category, Statutory Exclusion and 
Reasonable and Necessary Denials 
 
The MACs, CERT, RACs, and UPICs shall be cognizant that the denial type may 
affect the financial liability of beneficiaries. They shall ensure that benefit category 
denials take precedence over statutory exclusion and reasonable and necessary  denials. They shall ensure that statutory exclusion denials take precedence over 
reasonable and necessary denials. MACs, CERT, and UPICs shall use the guidelines 
listed below in selecting the appropriate denial reason. RACs shall follow denial 
reason guidance outlined in their SOW. 
 
  If additional documentation was requested from the provider or 
other entity for any MR reason (benefit category, statutory 
exclusion, reasonable/necessary, or coding), and the information is 
not received within 45 calendar days or a reasonable time 
thereafter, the MACS, CERT, and UPICs shall issue a reasonable 
and necessary denial, in full or in part. 
 
  If additional documentation was requested because compliance 
with a benefit category requirement is questioned and the 
documentation received fails to support compliance with the 
benefit category, the MACs, CERT, and UPICs shall issue a 
benefit category denial. 
 
  If additional documentation was requested because compliance 
with a benefit category requirement is questioned and the received 
documentation shows evidence that the benefit category 
requirement is present but is defective, the MACs, and UPICs shall 
issue a reasonable and necessary denial. 
 
EXAMPLE 1: A MAC is conducting a review of partial 
hospitalization (PH) claims from a provider who has a pattern of 
failing to comply with the benefit category requirement that there be a 
signed certification in the medical record. In the first medical record, 
the MAC finds that there is no signed certification present in the 
medical record. The MAC shall deny all PH services for this 
beneficiary under 1835(a) (2) (F) of the Act (a benefit category 
denial). However, in the second medical record, the MAC determines 
that a signed certification is present in the medical record, but the 
documentation does not support the physician's certification, the 
services shall be denied under 1862(a) (1) (A) of the Act (a 
reasonable and necessary denial) because the certification is present 
but defective. 
 
Example 2: The MAC performs a medical record review on a surgical 
procedure claim and determines that the procedure was cosmetic in 
nature and was not reasonable and necessary; the denial reason would 
be that the service is statutorily excluded since statutory exclusion 
denials take precedence over reasonable and necessary denials. 
 
The MACs, CERT, RACs, and UPICs shall deny payment on claims either partially (e.g., 
by down coding or denying one line item on a multi-line claim) or in full, and provide the  specific reason for the denial whenever there is evidence that a service: 
 
  Does not meet the Benefit Category requirements described in Title 
XVIII of the Act, NCD, or coverage provision in an interpretive 
manual; 
 
  Is statutorily excluded by other than 1862(a)(1) of the Act; 
 
  Is not reasonable and necessary as defined under 1862(a) (1) of 
the Act. MACs, CERT, RACs, and UPICs shall use this denial 
reason for all non-responses to documentation requests; 
 
  Was not billed in compliance with the national and local coding, 
payment or billing requirements; and/or 
 
  Was not delivered or provided to the beneficiary, or not provided 
as billed. 
 
The denial explanation needs to be more specific than merely repeating one of the above 
bullets. The general exception to the need for a full denial explanation is in the event of a 
clerical error, for example, the billing entity transposes two digits in the Medicare 
beneficiary identifier on a claim. The claim is quickly returned, usually electronically, to 
the provider for correction. In the case of dual-eligible beneficiaries where there is a 
State-specific policy, see CMS IOM Pub. 100-04, chapter 30, 60.5 A for a detailed 
explanation of handling administrative denials. 
 
3.6.3 - Beneficiary Notification 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs, CERT, RACs, and UPICs, as indicated. 
 
A. General 
 
If a claim is denied through prepayment or postpayment review, the MAC shall notify the 
beneficiary consistent with the requirements in PIM chapter 3, 3.6.2.3. The MAC shall 
include limitation of liability and appeals information. Notification can occur via 
Medicare Summary Notice (MSN). The CERT, RACs, and UPICs are not required to 
issue beneficiary notices for claims they deny. Instead, CERT, RACs, and UPICs shall 
communicate sufficient information to the MAC to allow the MAC to develop an 
appropriate beneficiary notice. 
 
The MACs are required to give notice to Medicare beneficiaries when claims are denied 
in part or in whole based on application of a LCD. All denials that result from LCDs shall 
provide the MSN message 15.19 in addition to the current applicable message. Message 
15.19 states (IOM Pub. 100-04, chapter 21): 
  A local coverage determination (LCD) was used when we made 
this decision. A LCD provides a guide to assist in determining 
whether a particular item or service is covered by Medicare. A copy 
of this policy is available from your local intermediary, carrier or 
(Medicare Administrative Contractor) by calling the number in the 
customer service information box on page one. You can compare the 
facts in your case to the guidelines set out in the LCD to see whether 
additional information from your physician would change our 
decision. 
 
The MACs shall make these messages available in Spanish where appropriate. The 15.19 
portion of the MSN message states: 
 
Una Determinacion de Cobertura Local (LCD, por sus siglas en 
ingles) fue utilizada cuando se tomo esta decision. La LCD es una 
guia que ayuda a determinar si un articulo o servicio en particular 
esta cubierto por Medicare. Una copia de esta poliza esta disponible 
en su intermediario, local o en su empresa de seguros Medicare, o en 
su Contratista Administrative de Medicare, al llamar al numero que 
aparece en la informacion de Servicios al Cliente en la pagina uno. 
Usted puede comparar los datos de su caso con las reglas 
establecidas en la LCD para ver si obteniendo informacion adicional 
de su medico pudiera cambiar nuestra decision. 
 
The MACs shall use the above message in every instance of a prepayment denial where a 
LCD was used in reviewing the claim. Use this message, and message 15.20 (now for 
FISS MACs, and when 15.20 is fully implemented for contractors on the MCS/VMS 
systems) on both full and partial denials, whether the denial was made following 
automated, non-medical review, or medical record review. MACs shall not use this 
message on denials not involving LCDs. For claims reviewed on a postpayment basis, 
include the language exactly as contained in the MSN message above if sending the 
beneficiary a new MSN. If sending a letter, include the language exactly as contained in 
the MSN message above. Message 15.20 currently states: 
 
The following policies [insert LCD ID# and NCD#] were used when we made this 
decision.(Pub.100-04, chapter 21). 
 
The MACs shall continue to use 15.19 in conjunction with the MSN message 15.20, 
where 15.19 is applicable. MACs should, at their discretion, combine these messages if 
necessary, but 15.19 shall not be deleted. 
 
In the case where the results of claims sampling are extrapolated to the universe, only 
those beneficiaries in the sample need to be notified. In RAC cases, the RAC and MAC 
Joint Operating Agreement (JOA) shall specify what information the RAC will supply to 
allow the MAC to notify the beneficiary when re-adjudication results in a change to the 
initial determination.   
 
3.6.4 - Notifying the Provider 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to, MACs, RACs, and UPICs, as indicated. 
 
A.  General 
 
At the conclusion of postpayment review, the MACs shall send a Review Results Letter 
to the provider even if no overpayment determination is made. If the MACs choose to 
send a Review Results Letter separately from the demand letter they shall do so within 
the timeframes listed in PIM chapter 3, 3.3.1.1F. Likewise, the RACs shall issue a 
Review Results Letter for all audits as outlined in their SOW requirements. 
 
UPICs shall comply with the requirements listed below when issuing Review Results 
Letters.  Each Review Results Letter shall include: 
 
  Identification of the provider or suppliername, address, and NPI; 
 
  Reason for conducting the review or good cause for reopening; 
 
  A narrative description of the overpayment situation that states the 
specific issues involved in the overpayment as well as any 
recommended corrective actions; 
 
  The review determination for each claim in the sample, including a 
specific explanation of why any services were determined to be 
non-covered, or incorrectly coded and if others were payable; 
 
  A list of all individual claims that includes the actual non-covered 
amount, the reason for non-coverage, the denied amounts, 
under/overpayment amounts, the 1879 and 1870 of the Act 
determinations made for each specific claim, along with the 
amounts that will and will not be recovered from the provider or 
supplier; 
 
  Any information required by PIM chapter 8, 8.4 for statistical 
sampling for overpayment estimation reviews; 
 
  Total underpayment amounts; 
 
  Total overpayment amounts that the provider or supplier is 
responsible for; 
 
  Total overpayment amounts the provider or supplier is not  responsible for because the provider or supplier was found to be 
without fault; 
 
  MACs shall include an explanation that subsequent adjustments 
may be made at cost settlement to reflect final settled costs; 
 
  An explanation of the procedures for recovery of overpayments 
including Medicares right to recover overpayments and charge 
interest on debts not repaid within 30 days (not applicable to RACs 
or UPICs); 
 
  The providers or suppliers right to request an extended repayment 
schedule (not applicable to RACs or UPICs); 
 
  The MACs and UPICs shall include limitation of liability and 
appeals information in the provider notices; 
 
  The MACs shall include appeals information in the provider 
notices; 
 
  The MACs shall include the provider or supplier financial rebuttal 
rights under PIM chapter 3, 3.6.5; and 
 
  For MAC Review Results Letter only, a description of any 
additional corrective actions or follow-up activity the MAC is 
planning (i.e., prepayment review, re- review in 6 months). 
 
If a claim is denied through prepayment review, the MACs and UPICs are encouraged to 
issue a notification letter to the provider but may use a remittance notice to meet this 
requirement. However, if a claim is denied through postpayment review, the MAC and 
RAC shall notify the provider by issuing a notification letter to meet this requirement. 
The UPIC shall use discretion on whether to issue a notification letter. 
 
The CERT contractor is NOT required to issue provider notices for claims they deny. 
Instead, the CERT contractor shall communicate sufficient information to the MAC to 
allow the MAC to develop an appropriate provider notice. 
 
B.  MACs 
 
The MACs need provide only high-level information to providers when informing them 
of a prepayment denial via a remittance advice. In other words, the shared system 
remittance advice messages are sufficient notices to the provider. However, for medical 
record review, the provider should be notified through the shared system, but the MAC 
shall retain more detailed information in an accessible location so that upon written or 
verbal request from the provider, the MAC can explain the specific reason the claim was 
denied as incorrectly coded or otherwise inappropriate.   
C.  RACs 
 
For overpayments detected through medical record review, the RAC shall send a review 
results letter as indicated in the RAC SOW. In addition, the RAC shall communicate 
sufficient information to the MAC so that the MAC can send a remittance advice to the 
provider and collect the overpayment. 
 
For underpayments, the RAC shall notify the provider as indicated in the RAC SOW. In 
addition, the RAC shall communicate sufficient information to the MAC so that the MAC 
can send a remittance advice to the provider and pay back the underpayment. 
 
D.  UPICs 
 
For overpayments detected through medical record review, and after coordination 
between the UPIC and OIG, the UPIC shall send a review results letter (the MAC sends 
the demand letter). In addition, the UPIC shall communicate sufficient information to the 
MAC so that the MAC can send a demand letter to the provider and collect the 
overpayment. The UPIC shall use discretion on whether to send the review results letter. 
 
E.  Indicate in the Denial Notice Whether Records Were Reviewed 
 
For claims where the MAC or UPIC had sent an ADR letter and no timely response was 
received, they shall issue a denial and indicate in the provider denial notice, that the 
denial was made without reviewing the documentation because the requested 
documentation was not received or was not received within the allowable time frame 
(1862(a) (1) of the Act). This information will be useful to the provider in deciding 
whether to appeal the decision. When denying the claims, contractors shall use Group 
Code: CO - Contractual Obligation and Claim Adjustment Reason Code (CARC) 50 - 
these are non-covered services because this is not deemed a medical necessity by the 
payer and Remittance Advice Remark Code (RARC) M127 - Missing patient medical 
record for this service. 
 
For claims where the reviewer makes a denial following medical record review, the 
reviewer has the discretion to indicate in the denial notice, using Group Code: CO - 
Contractual Obligation and Claim Adjustment Reason Code (CARC) 50 - these are non- 
covered services because this is not deemed a medical necessity by the payer that the 
denial was made after review of submitted documentation. This includes those claims 
where the provider submits documentation along with the claim and the reviewer selects 
that claim for review. 
 
3.6.5 - Provider Financial Rebuttal of Findings 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to the MACs. It does not apply to Recovery Auditors, CERT, and 
UPICs.   
A.  General 
 
Providers or suppliers have the right to submit a financial rebuttal statement in 
accordance with 42 CFR 405.370-375 following receipt of the review results letter and 
prior to recoupment of the overpayment. The rebuttal statement and any accompanying 
evidence must be submitted within 15 calendar days from the date of the results letter 
unless the MAC staff find cause to extend or shorten the time frame. 
 
B.  Review of Financial Rebuttal Statement(s) 
 
Within 15 calendar days of receipt of a financial rebuttal, MAC staff shall consider the 
statement and any evidence submitted to reach a determination regarding whether the 
facts justify the recoupment. However, the MAC shall not delay recovery of any 
overpayment beyond the date indicated in the review results letter in order to review and 
respond to the rebuttal statement even if the principal of the debt is modified after 
reviewing the rebuttal statement (See 42 CFR 405.375(a)). The MAC shall provide a 
copy of the rebuttal request and a copy of the MACs response on the rebuttal outcome to 
the UPICs. 
 
C.  Cost Report Issues 
 
Because of the cost report relationship to the overpayment, it is important to note that the 
projected overpayment recovered from a provider as a result of a postpayment review 
using statistical sampling for overpayment estimation is based on the interim payment 
rate in effect at the time of the review. 
 
3.6.6 - Review Determination Documentation Requirements 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs, CERT, Recovery Auditors, and UPICs, as 
indicated. 
 
For each claim denied, in full or in part, the MACs, CERT, and UPICs shall carefully 
document the basis for the denial in the internal claim record. If there are several reasons 
for denial they shall document each reason in the internal claim record. In addition, the 
internal claim record should document the date and content of the provider notice of 
review ( 3.2.2), additional documentation requests (3.2.3), and third party 
documentation requests and response (3.2.3.3). 
 
In verifying an overpayment, MACs, CERT, Recovery Auditors, and UPICs shall 
carefully document claims for services not furnished or not furnished as billed so that the 
denials are more likely to be sustained upon appeal and judicial review. 
 
3.7 - Corrective Actions 
(Rev. 721; Issued: 06-09-17; Effective: 07-11-17; Implementation: 07-11-17)   
This section applies to MACs. 
 
The MACs shall take corrective actions they deem necessary based upon their findings 
during or after a review. These actions may include payment suspension, imposition of 
civil money penalties, institution of prepayment or postpayment review, additional edits, 
etc. 
 
Providers/suppliers who show a pattern of failing to comply with requests for additional 
supporting documentation for any claims submitted to CMS may be subject to medical 
record review for all claims. This paragraph applies to both providers and suppliers and 
to instances in which CMS or its contractors request documentation directly from these 
entities to support services billed on the claim. This paragraph does not change or 
diminish the providers or suppliers responsibility to provide required documentation. 
For purposes of this paragraph, a pattern is two or more ADRs that have gone 
unanswered. 
 
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 
providers 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. 
 
3.7.1.1 - Provider Error Rate 
(Rev. 738; Issued: 08-18-17; Effective Date: 09-19-17; Implementation Date: 09-19-
17) 
 
This section applies to MACs. 
 
If the MAC identifies a provider-specific problem, the provider error rate is an important 
consideration in deciding how to address the problem. For instance, a provider with a low 
error rate with no history of patterns of errors may require a fairly minor corrective action 
plan such as education with recoupment of overpayment. Other factors such as the total 
dollar value of the problem and the past history of the provider also deserve 
consideration. The MAC assesses the nature of the problem as minor, moderate or major 
and uses available tools such as data analysis and evaluation of other information to 
validate the problem. 
 
A.  Provider Error Rate Formula 
 
The MACs shall include claims denied due to no response to ADRs when calculating the 
provider error rate. 
  The MACs shall use the following formula for prepayment review to calculate the 
providers service specific error rate: 
 
Total Dollar amount of allowable** charges for services billed in error as determined by 
MR*** 
Total Dollar amount of allowable** charges for services subject to a medical review 
documentation request 
 
For postpayment review, the MACs shall use the following formula to calculate the 
providers service specific error rate: 
 
Total Dollar amount of services paid in error as determined by MR*** 
Total Dollar amount of services subject to a medical review documentation request 
 
**If allowable charges are not available, submitted charges may be used until system 
changes are made. 
 
***Net out (subtract) the dollar amount of charges under billed 
 
3.7.1.2 - Vignettes 
(Rev. 377, Issued: 05-27-11, Effective: 06-28-11, Implementation: 06-28-11) 
 
This section applies to MACs. 
 
The following vignettes provide guidance on how the MACs shall characterize and 
respond to varying levels of confirmed errors. These are examples of results from 
medical review accompanied by suggested corrective actions.  This information should 
only be used as a guide and is not meant to be a comprehensive list of vignettes nor an 
inclusive list of administrative actions.  The MAC MR department shall include 
communication and follow-up with provider outreach and education (POE) throughout 
the PCA process to coordinate efforts toward problem resolution.  The MACs shall 
monitor trends indicating widespread educational need and shall ensure that POE staff 
has access to copies of all MR provider notification and feedback letters so they are 
prepared for provider requests for education (See IOM Pub. 100-04, chapter 20, 3.4.2, 
for further information). 
 
1.  Twenty claims from one provider are reviewed.  Once claim is denied because a 
physician signature is lacking on the plan of care.  The denial reflects 7 percent of 
the dollar amount of claims reviewed.  Judicious assessment of medical review 
resources indicates no further review is necessary at this time.  The MAC uses 
data analysis to determine where to target medical review activities in the future. 
 
2.  Forty claims from one provider are reviewed.  Twenty claims are for services 
determined to be not reasonable and necessary.  These denials reflect 50 percent 
of the dollar amount of claims reviewed.  One hundred percent prepayment 
review is initiated due to the high number of claims denied and the high dollar  amount denied.  The MAC provides notification to the provider about specific 
errors made and makes a priority referral to POE to inform them of the severity of 
the problem. 
 
3.  Forty claims from one provider are reviewed.  Thirty-five claims are denied.  
These denials reflect 70 percent of the dollar amount of claims reviewed.  
Payment suspension is initiated due to the high denial percentage and the 
Medicare dollars at risk.  The MAC provides notification to the provider about the 
specific errors made and makes a priority referral to POE to inform them of the 
severity of the problem. 
 
4.  Forty claims from one provider are reviewed.  Thirty-three claims are denied. 
These denials reflect 25 percent of the dollar amount of the claims reviewed.  The 
MAC provides notification to the provider about the specific errors made.  The 
MAC initiates a moderate amount (e.g., 30 percent) of prepayment medical 
review to ensure proper billing. 
 
5.  Thirty-five claims from one provider are reviewed.  Thirty claims are denied 
representing 75 percent of the dollar amount of the claims reviewed.  Many of the 
denials represent services provided to beneficiaries who did not meet the 
Medicare eligibility requirements.  The MAC provides notification to the provider 
about specific errors made and makes a priority referral to POE to inform them of 
the severity of the problem. A consent settlement offer is made but declined by 
the provider.  A postpayment review of statistical sampling for overpayment 
estimation is performed and an overpayment is projected to the universe of similar 
claims from the provider.  Overpayment collection is initiated. 
 
6.  Twenty-five claims from one supplier are reviewed.  Five claims representing 5 
percent of the dollar amount of the claims are denied.  This supplier is known to 
the DME MAC as one who has a significant decrease in billing volume when 
targeted medical review is initiated.  The DME MAC is concerned that this 
supplier may be selectively submitting bills when placed on medical review and 
chooses to continue some level of prepayment medical review despite the low 
error rate. 
 
7.  Twenty claims from one provider are reviewed.  Ten claims are denied for 
incomplete physician orders representing 65 percent of the dollar amount of the 
claims.  The MAC issues a letter to inform the home health agency (HHA) about 
the denials and the reason for the denials.  In response to the notification letter, 
the agency owner initiated a mandatory training program for select staff.  The 
HHA was put on 30 percent prepayment medical review.  Results of the review 
indicated an improvement in the error rate to 30 percent (based on dollars denied 
divided by dollars reviewed).  On appeal, most of the denials were overturned.  
The MAC consults with the ALJ to understand why the cases are being 
overturned and consults with the RO on appropriate next steps. 
  3.7.1.3 - Provider Notification and Feedback 
(Rev. 377, Issued: 05-27-11, Effective: 06-28-11, Implementation: 06-28-11) 
 
This section applies to MACs. 
 
Direct communication between the MAC and the provider is an essential part of solving 
problems.  This process is carried out through written communication or by telephone as 
a result of specific claims or a group of reviewed claims.  The overall goal of providing 
notification and feedback is to ensure proper billing practices and appropriate 
consideration of coverage criteria so claims will be submitted and paid correctly. 
 
The MACs shall include an offer to provide individualized education in the notification 
letter along with contact information for POE. When inquiries are received in response to 
a provider notification or feedback letter, only responses to those inquiries directly 
related to a specific claim or group of claims reviewed on probe or targeted medical 
review shall be charged to medical review. This charge must be in the appropriate 
activity code or applicable SOW section for the type of review performed. 
 
3.7.2 - Comparative Billing Reports (CBRs) 
(Rev. 377, Issued: 05-27-11, Effective: 06-28-11, Implementation: 06-28-11) 
 
This section applies to MACs. 
 
The MACs have the discretion to develop and issue comparative billing reports in the 
following three (3) situations: 
 
1.  Provider-specific CBRs for providers with aberrant billing patterns. 
 
The MACs have the discretion to give provider-specific comparative billing reports to 
providers with the highest utilization for the services they bill in order to address 
potential over-utilization.  The MACs have the discretion to send the CBRs based 
solely on data analysis, without further review or CBRs may be included in the 
feedback and notification information issued as a result of probe and targeted medical 
review.  These reports shall provide comparative data on how the provider varies 
from other providers in the same specialty payment area or locality. MACs should not 
charge a fee for providing these reports. 
 
2.  Provider-specific or specialty-specific CBRs requestors. 
 
To provide good customer service, MACs have the discretion to provide specific 
reports to providers or provider associations who request such a report.  They may 
charge a fee for providing these discretionary reports.  However, any money collected 
shall be reported as a credit in the appropriate activity code or the applicable SOW 
section and be accompanied with a rationale for charging the fee.  Revenues collected 
from these discretionary activities shall be used only to cover the cost of these 
activities, and shall not be used to supplement other MAC activities.  If the MACs  choose to make such reports available, the MACs shall describe on their Web site the 
mechanism by which a provider or provider association can request the report and 
state the associated fee. 
 
3.   CBRs for service-specific problems 
 
When widespread problems are verified, MACs shall refer that information to their 
POE department for possible Web site posting.  For example, data analysis may 
reveal that home health providers in a particular state bill three (3) times more of a 
particular code than do home health providers in other surrounding states.  The MACs 
shall not charge a fee for posting these reports. 
 
The MACs shall ensure that POE staff has ready access to copies of all MR provider 
notification and feedback letters so that they will have this information available in 
the event that a provider contacts POE requesting education.  If the problem identified 
by MR is of medium or high priority, the MAC shall make a priority referral to POE, 
alerting POE staff to the degree of severity and educational need. 
 
3.7.3 - Evaluating the Effectiveness of Corrective Actions 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs. 
 
The MACs shall evaluate the effectiveness of their corrective actions on targeted 
providers or problem areas at least every three (3) months until there is evidence that the 
poor practice has been corrected. MACs shall establish a method to determine the 
disposition of educational referrals made to POE to ensure coordination of efforts and 
resolution of identified problems. MACs have the discretion to use the PTS to perform 
this function, but are not mandated to do so. MACs shall use the PTS to coordinate 
contacts with providers regarding MR activities. MACs shall also coordinate this 
information with the UPICs to ensure contacts are not in conflict with fraud related 
activities. 
 
3.7.3.1 - Evaluation of Prepayment Edits 
(Rev. 721; Issued: 06-09-17; Effective: 07-11-17; Implementation: 07-11-17) 
 
This section applies to MACs. 
 
The MACs shall develop prepayment edits based on the findings of data analysis, 
followed by identification and prioritization of identified problems. The MACs shall 
evaluate all service-specific and provider-specific prepayment edits as follows: 
 
  Automated edits shall be evaluated annually, and 
  Non-medical record review or medical record review edits shall be evaluated 
quarterly. 
  The edit evaluations are to determine their effectiveness on the provider or service area 
while assessing the effect of the edit tasks on workload.  The MACs shall consider an edit 
to be effective when it has a reasonable rate of denial relative to suspensions and a 
reasonable dollar return on cost of operation or potential to avoid significant risk to 
beneficiaries. The MACs shall revise or replace edits that are ineffective.  Edits may be 
ineffective when payments or claims denied are very small in proportion to the volume of 
claims suspended for review.  It is appropriate to leave edits in place if sufficient data are 
not available to evaluate effectiveness, for instance, a measurable impact is expected, or a 
quarter is too brief a time period to observe a change.  The MACs shall analyze 
prepayment edits in conjunction with data analysis to confirm or re-establish priorities.  
The MACs should replace existing effective edits to address problems that are potentially 
more costly, if appropriate. 
 
3.7.3.2 - Evaluating Effectiveness of Established Automated Edits 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs. 
 
MACs shall consider the following factors when looking at edit effectiveness for 
established automated edits: 
 
  Time and staffing needs for review and appeal reviews. MACs 
shall implement mechanisms (e.g., manual logs, automated 
tracking systems) to allow the appeals unit to communicate to the 
MR unit information such as when denial categories are causing 
the greatest impact on appeals, the outcome of the appeal, and 
 
  MACs shall maintain and make available to the appropriate CMS 
staff documentation demonstrating that they consider appeals in 
their edit evaluation process; and specificity of edits in relation to 
identified problem(s). 
 
The MACs should note that even an automated edit that results in no denials may be 
effective as long as the presence of the edit is not preventing the installation of other 
automated edits. The MAC shall provide the claims data necessary to the UPIC to 
evaluate the effectiveness of edits implemented at UPIC request. The MACs shall 
th 
provide this report on a monthly basis by the 15 business day of each month. This 
requirement could also be met by the UPICs retrieving claim data necessary directly from 
the EDC if available. 
 
A.  Edit Effectiveness for all Other Edits 
 
The MACs shall consider the following factors when looking at edit effectiveness for all 
other edits: 
 
  Time and staffing needs for review and appeal reviews. MACs  shall implement mechanisms (e.g., manual logs, automated 
tracking systems) to allow the appeals unit to communicate to the 
MAC MR unit and the UPIC just specific to UPIC edits 
information such as which denial categories are causing the 
greatest impact on appeals, and the outcome of the appeal. MACs 
shall maintain and make available to CMS documentation 
demonstrating that appeal outcomes are considered in their edit 
evaluation process; 
 
  Specificity of edits in relation to identified problem(s); 
 
  Demonstrated change in provider behavior, i.e., the MAC can show 
a decrease in frequency of services per beneficiary, the decrease in 
the number of beneficiaries receiving the services, the service is no 
longer billed, or another valid measure can be used to reflect a 
change in provider behavior over time; 
 
  Impact of educational or deterrent effect in relation to review costs; 
and 
 
  The relative priorities or competing edits in terms of the number of 
claims/days/charges. 
 
The MACs shall test each edit before implementation to verify that the edit accomplishes 
the objective of efficiently selecting claims for review and to determine the edits impact 
on workload. 
 
3.7.3.3 - Evaluation of Postpayment Review Effectiveness 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs. 
 
The MACs shall determine if any other corrective actions are necessary 
such as: 
 
  Uncovering potential fraud in the course of MR postpayment 
review activities. The MR unit shall refer these cases to the UPIC. 
If it is believed that the overpayment resulted from potential fraud, 
a refund may not be requested from the provider until the potential 
fraud issue is resolved. 
 
  Initiating provider or supplier specific edits to focus prepayment 
view on the problem provider or supplier or group of providers or 
suppliers, if appropriate ; 
 
  Working with the CMS Central Office Division of Benefit Integrity  Management Operations (DBIMO) Fraud and Abuse Suspensions 
and Sanctions (FASS) Team to suspend payment to the provider or 
group of providers; 
 
  Referring provider certification issues to the State survey agency 
through CMS staff; 
 
  Referring quality issues involving inpatient hospital services to the 
RO and QIO; and 
 
  Coordinating with the QIO and MAC on interrelated billing 
problems 
 
The MACs periodically perform a follow-up analysis of the provider(s) or supplier(s) for 
as long as necessary to determine if further corrective actions are required. In some cases, 
it may be feasible and timely to perform the follow-up analysis of the provider or supplier 
after the three (3) month time period. The MACs shall continue to monitor the 
provider(s) or supplier(s) until there is a referral to the UPICs for potential fraud, 
evidence that the utilization or billing problem is corrected, or data analysis indicating 
resources would be better utilized elsewhere. 
 
3.7.4 - Tracking Appeals 
(Rev. 377, Issued: 05-27-11, Effective: 06-28-11, Implementation: 06-28-11) 
 
This section applies to MACs. 
 
The MACs shall track and evaluate the results of appeals. It is not an efficient use of 
medical review resources to deny claims that are routinely reversed upon appeal.  When 
such outcomes are identified, MACs shall take steps to understand why hearing or 
appeals officers viewed the case differently from them, and discuss appropriate changes 
in policy, procedure, outreach or review strategies with the regional office. 
 
3.7.5 - Corrective Action Reporting Requirements 
(Rev.: 10100; Issued: 05-08-2020; Effective: 06-09-2020; Implementation: 06-09-
2020)  
 
A. General  
 
This section applies to MACs.  
 
The CMS will provide information to the MACs regarding CMS Recovery Audit 
Contractor (RAC), and OIG-identified issues via Technical Direction Letters (TDLs). 
The TDLs will be sent to the MACs on a quarterly basis. Each MAC shall report 
corrective actions by the dates stated in the TDLs.  
 
B. Corrective Action Reporting on CMS and OIG-Identified Issues    
The CMS will provide MACs with a list of issues on an Excel spreadsheet template 
(Corrective Actions Taken on CMS and OIG-Identified Issues). These issues may be 
uncovered by the RAC, OIG audits, internal CMS analysis, or other means. The MACs 
shall review the spreadsheet, type precise responses on the template (see interim and final 
reportable action statement samples below), and upload the excel file or flat file to the 
RAC Data Warehouse (RAC DW).  
 
For each of the issues, MACs shall report interim actions, final actions, and action dates 
(see interim and final reportable action statement examples below). The common factor 
between all reportable actions is quantifiability. The distinguishing factor between the 
two types of reportable actions is intervention implementation. Interim reportable actions 
generally indicate in-progress reviews of issues prior to the initiation of final actions. 
Final reportable actions indicate specific interventions completed to prevent future 
improper payments.  
 
Examples of interim reportable action statements:  
 
  MAC is planning a 50% post-payment review (to be performed between 
08/01/2014  08/31/2014) of 200 claims (with dates of service between 
01/01/2012  12/31/2012).  
  MAC performed a 100% pre-payment review for DRG numbers ###  ### on 
02/14/2014 (with dates of service between 01/01/2012  12/31/2012).  
  MAC performed a pre-payment widespread review using a 100 claim probe on 
03/26/2014 (with dates of service between 01/01/2012  12/31/2012).  
  MAC performed a provider-specific pre-payment review on 04/17/2014 (with 
dates of service between 01/01/2012  12/31/2012).  
  Due to resource limitations, not yet able to fully research issue (with dates of 
service between 01/01/2012  12/31/2012).  
 
Examples of final reportable action statements:  
 
  MAC held a provider seminar for 500 chiropractors regarding documentation 
requirements on 11/12/2013.  
  MAC published an article regarding billing for nebulizer drugs on 02/27/2014 that 
explained the coverage policy for nebulizer drugs.  
  MAC installed an automated edit and validated functionality on 03/19/2014 for 
codes ###  ###.  
  If readily available, please provide edit effectiveness as defined in PIM 
o
section 3.7.3.1  Evaluation of Prepayment Edits. <Please insert cost 
savings and number or percentage of claims denied.>  
 
  MAC performed a provider -specific review resulting in a provider education 
activity. <Comparative Billing Report, letter, one-on-one telephone 
explanation,...>...on 05/19/2014.  
  Based on analysis, this is not an issue within jurisdiction X.    
Interim and final reportable action statement rationales:  
 
  In the additional comments section of the TDL template, MACs shall provide 
brief supplementary rationales for the reported actions. o For example, rationales 
may state that analysis produced no significant findings due to low volume, 
claims paid, lower risk and lower priority ranking when compared with other 
issues.  
 
 
  The MACs have the discretion to also utilize the additional comments section to 
briefly explain pertinent background information regarding the MACs processes 
for specific issues. The MACs may also utilize the space to communicate 
suggestions for CMS to consider regarding possible future actions. 
 
The MACs shall use the format (Corrective Actions Taken on CMS and OIG-Identified 
Issues) located in Exhibit 18, section A for reporting purposes. The MACs shall use the 
prescribed format, acceptable to the RAC DW. The MACs shall upload the file by the 
date specified in the TDL. If the due dates fall on a weekend or a federal holiday, the 
MAC shall upload the file on the closest business day after the weekend or holiday. A 
TDL may occasionally provide an exception to the submission criteria described in the 
PIM and the exception will be stated within the text of the memorandum.  
 
Updates to previous reportable actions  
 
The MACs shall keep CMS informed of any updates or changes to interim or final 
reportable actions on top issues from past TDL responses. The format located in Exhibit 
18, Section A will included a column titled Updated Responses. The MACs shall enter 
the following information, in a single cell, for each update:  
  The New Issue number being updated  
  The Issue Label  
  The fiscal year and quarter that the responses were first provided  
  The type of response originally provided [Interim or Final]  
  The type of response being provided in the update [Interim or Final]  
  The response statement in the format described above  
 
The MACs should leave this section blank if they have no updates for the quarter.  
 
C. Overpayment Recovery Reporting  
 
The CMS will provide the MACs with specific claims information from Office of the 
Inspector General (OIG) audits on a quarterly basis via TDLs. These specific claims have 
not been reviewed by the OIG and overpayments have not yet been identified. The MACs 
have the discretion to review these specific OIG-identified claims. The MACs shall 
report overpayment recoveries pertaining to the specific OIG-identified claims to the 
CMS on a quarterly basis. If the MAC does not plan on conducting review or cannot  conduct review on the specific OIG-identified claims, the MAC shall indicate that no 
medical review will be conducted and shall also indicate the reason why no medical 
review and/or overpayment recovery will be conducted on the particular claims set. The 
reporting shall include the Medicare contractor number, the OIG audit number (e.g. A- 
01-08-00528, OEI-01-04-0060) and the cumulative amount collected on the 
overpayments resulting from the specific set of OIG-identified claims. The cumulative 
amount shall include appeals. The CMS will indicate the final reporting date in the 
reporting document when the recovery process has been completed for a specific set of 
OIG-identified claims. CMS will indicate when the report shall be closed. The MACs 
have the discretion to report on overpayments that have been referred or are uncollectable 
at this time resulting from the specific set of OIG-identified claims.  
 
The MACs shall submit their response to CMS on or before March 1, June 1, September 
1, and December 1. If the due dates fall on a weekend or a federal holiday, the MACs 
shall submit the report on the closest business day after the weekend or holiday. The 
MACs shall submit their response in Excel via email to the CMS contact indicated in the 
most recent TDL from CMS which includes the claim information and report number. 
The MACs shall use the format titled Overpayment Recovery on OIG Claims Format 
located in Exhibit 18 for reporting purposes. The MAC has the discretion to readjust the 
format for use in Excel. The MAC shall complete all fields in the format except for the 
one optional column. The MACs have the discretion to complete the column titled 
Overpayments referred or uncollectable (in dollars).  
 
3.8 - Administrative Relief from MR During a Disaster 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
This section applies to MACs and Recovery Auditors. UPICs refer to the 
PIM chapter 4. 
 
A.  General 
 
When a disaster occurs, whether natural or man-made, MACs and Recovery Auditors 
shall anticipate both an increased demand for emergency and other health care services, 
and a corresponding disruption to normal health care delivery systems and networks. In 
disaster situations, MACs should do whatever they can to ensure that all Medicare 
beneficiaries have access to the emergency or urgent care they need. MACs are 
encouraged to let providers know (via Web site, responses to provider calls, etc.) that the 
provider's first responsibility, as in any emergency, is to provide the needed emergency or 
urgent service or treatment. The MACs should assure providers they will work with 
providers to ensure that they receive payment for all covered services. The administrative 
flexibility available to MACs and Recovery Auditors is discussed below. These actions 
will prevent most inappropriate denials and subsequent appeals. 
 
B.  Definition of Disaster 
 
A disaster is defined as any natural or man-made catastrophe (such as hurricane, tornado,  earthquake, volcanic eruption, mudslide, snowstorm, tsunami, terrorist attack, bombing, 
fire, flood, or explosion) which causes damage of sufficient severity and magnitude to 
partially or completely destroy medical records and associated documentation that could 
be requested by the MACs and Recovery Auditors in the course of a Medicare audit, 
interrupt normal mail service (including US Postal delivery, overnight parcel delivery 
services, etc.), and/or otherwise significantly limit the provider's daily operations. 
 
A disaster may be widespread and impact multiple structures (e.g., a regional flood) or 
isolated and impact a single site only (e.g., water main failure). The fact that a provider is 
located in a presidentially declared disaster area under the power of the Stafford Act is 
not sufficient in itself to justify administrative relief, as not all structures in the disaster 
area may have been subject to the same amount of damage. Damage must be of sufficient 
severity and extent to compromise retrieval of medical documentation. 
 
C.  Basis for Providing Administrative Relief 
 
In the event of a disaster, MACs and Recovery Auditors shall grant temporary 
administrative relief to any affected providers for up to 6 months (or longer with good 
cause). Administrative relief is to be granted to providers on a case-by-case basis in 
accordance with the following guidelines: 
 
  The MACs and Recovery Auditors shall make every effort to be 
responsive to providers who are victims of the disaster and whose 
medical documentation may be partially or completely destroyed. 
 
  Providers must maintain and submit verification upon contractor 
request by the MAC or Recovery Auditor that (1) a disaster has 
occurred and (2) medical record loss resulted from this disaster to 
the point where administrative relief from medical review 
requirements is necessary to allow the provider sufficient time to 
retrieve copies of, or restore damaged, medical documentation. 
 
Verification of the disaster and the resultant damage should include but is not limited to: 
 
(1)  Copies of claims filed by the provider with his/her insurance and 
liability company; and 
(2)  Copies of police reports filed to report the damage, (3) copies of claims  
submitted to FEMA for financial assistance, (4) copies of tax reports 
filed to report the losses, or (5) photographs of damage. MACs and 
Recovery Auditors shall not routinely request providers to submit 
verification of damage or loss of medical record documentation. 
 
D.  Types of Relief 
 
Providers Directly Affected By Disaster 
  The MACs and Recovery Auditors shall stop sending ADR letters to providers who have 
been directly affected for at least 60 calendar days. The MACs and Recovery Auditors 
shall allow up to an additional six months beyond the original due date for the submission 
of requested records. Requests for extensions beyond this date can be granted with good 
cause at the discretion of the MAC or Recovery Auditor. 
 
In the case of complete destruction of medical records where no backup records exist, 
MACs and Recovery Auditors shall accept an attestation that no medical records exist 
and consider the services covered and correctly coded. In the case of partial destruction, 
MACs and Recovery Auditors should instruct providers to reconstruct the records as 
much as possible with whatever original records can be salvaged. Providers should note 
on the face sheet of the completely or partially reconstructed medical record: "This record 
was reconstructed because of disaster." 
 
Providers Indirectly Affected By Disaster 
 
For providers that are indirectly affected by a disaster (e.g., an interruption of mail 
service caused by a grounding of US commercial air flights), MACs and Recovery 
Auditors shall take the following actions: 
 
For ADRs, extend the parameter that triggers denial for non-receipt of medical records 
from 45 calendar days to 90 calendar days. ADRs shall reflect that the response is due in 
90 calendar days rather than 45 calendar days. This action will prevent most 
inappropriate denials and unnecessary increases in appeals workload. 
 
If the MAC or Recovery Auditor receives the requested documentation after a denial has 
been issued but within a reasonable number of days beyond the denial date, the MAC or 
Recovery Auditor has the discretion to reopen the claim and make a medical review 
determination. Many reviewers follow a standard 15 calendar days although MACs and 
Recovery Auditors shall make these decisions on a case-by-case basis. The MACs and 
Recovery Auditors shall allocate the workload, costs and savings to the appropriate MR 
activity. 
 
The MACs and Recovery Auditors shall review reopened claims retroactively to the date 
of the disaster. The MACs data analyses shall take into consideration the expected 
increase in certain services in disaster areas. 
 
E.  Impact on MAC Performance Evaluations 
 
During performance evaluations, CMS will consider a waiver to all MAC MR 
requirements, as necessary, to allow MACs the flexibility to handle issues that arise in the 
aftermath of a disaster. Examples of such waived requirements include workload targets 
and any other MR administrative rules. MACs shall retain documentation of how their 
MR operations were affected during the disaster and make it available to Performance 
Evaluation Teams and other CMS Staff, upon request. 
  3.9 - Defending Medical Review Decisions at Administrative Law Judge 
(ALJ) Hearings 
(Rev. 853, Issued: 01-04-19; Effective: 02-05-19; Implementation: 02-05-19) 
 
This section in its entirety applies to MACs. This section applies to Recovery Auditors, 
CERT, UPICs, and the SMRC, as indicated in their SOWs. 
 
Overview: 
 
Effective March 20, 2017 several changes were made to the regulations that outline the 
activities related to contractor participation in ALJ hearings. Under the new regulations, 
CMS contractors are limited to 3 roles in an ALJ hearing: a Participant, a Party, or a 
Witness (defined in detail below). These changes are outlined in 42 CFR 405.1010 and 
42 CFR 405.1012.   
  
A physician overseeing participation shall be a current Contractor Medical Director 
(CMD), a contractor employed physician or any combination thereof. Nurses and other 
staff may assist the physician with the tasks described in this section. While the physician 
is generally the primary individual overseeing and/or taking party or participant status, a 
contractor may elect to have an attorney or clinician take party or participant status, or 
another experienced qualified individual if approved by their COR. In either situation, the 
contractor must be prepared to discuss details related to the facts of each claim under 
appeal, the relevant coverage policies and payment requirements, including any 
clarification required on decisions made earlier in the appeals process. For post-pay 
audit/overpayment cases, the contractor must be prepared to discuss the background on 
how the provider/supplier was selected for review, results of the sample case 
adjudications, as well as matters related to the extrapolation methodology and/or 
processes. 
 
This section establishes expectations related to the contractors participation and 
associated coordination activities, although CMS may provide additional guidance and 
direction as needed. Further rules and procedures related to the ALJ hearing process are 
contained in 42 CFR 405.1000.   
 
The MAC shall capture and report the ALJ participation and party data in their monthly 
status report to CMS. Contractors shall record the frequency of their support as a witness 
in the narrative field of the monthly status reports. Contractors shall ensure that JOAs are 
sufficient to support the ALJ hearing process and related coordination activities. 
 
 
Role of the Participant:   
 
In accordance with the revised regulation under 42 CFR Part 405.1010(c) and (d), all 
contractors participation as a participant (i.e., non-party) shall be limited to submitting 
written testimony and/or position papers (except in those instances when non-party  participants are able to provide testimony to clarify factual or policy issues in the case
as noted in the scenario below).   
 
The regulations do not prohibit multiple CMS contractors and/or related entities from 
participating in the ALJ hearing as a participant. However, if no contractor or CMS 
invokes party status, then the first entity to submit their election to participate as a non-
party participant to the ALJ may participate in the oral hearing (limited to clarification of 
factual or policy issues, as requested by the ALJ). All other entities may participate, but 
are precluded from the hearing and may only submit written testimony and/or position 
papers as indicated in 42 CFR 405.1010(d)(1) and (2). If the contractor is able to 
participate in the hearing, they shall be adequately prepared to respond to questioning by 
the ALJ regarding all issues related to the claims under appeal. Because participation 
status does not include the same rights as full party status, the contractor may not call 
witnesses or cross-examine witnesses of another party, as indicated in 42 CFR 
405.1010(c)(1).    
 
(Note: At this time, CMS would not expect contractors to be responsible for clarifying 
factual or policy issues for cases/claims outside of their jurisdiction.) 
 
Role of the Party:   
 
Contractors shall invoke party status in ALJ hearings in accordance with the regulatory 
provisions in 42 CFR  405.1012 and the CMS-prescribed prioritization process, 
described below, for cases or items/services of interest to CMS. Under 42 CFR 
405.1012(d)(1), the first contractor to invoke party status with the ALJ is made the party 
to the hearing. All other contractors who invoke party status for that particular hearing 
are made participants and are precluded from the hearing (See Role of the Participant 
section above). 
 
Note: At this time, CMS would not expect contractors to be responsible for representing 
cases/claims outside of their jurisdiction. 
 
If the contactor is interested in a particular case, but is precluded from invoking party 
status based on the CMS-prescribed prioritization of cases or otherwise, the contractor 
may request leave from the ALJ in accordance with 42 CFR 405.1012(d)(2).  The 
request for leave process occurs outside of the Administrative Qualified Independent 
Contractor (AdQIC) portal, described below. In submitting a request for leave to the 
ALJ, the contractor is formally requesting that the ALJ grant the contractor the right to be 
a secondary party to the hearing.  Requests for leave to the ALJ shall also include the 
reason(s) why the contractor believes that their presence as a secondary party in the ALJ 
Hearing is necessary. The ALJ shall make the determination as to whether the contractor 
is granted leave. If this is approved, the contractor shall become a secondary party to 
the hearing. Alternatively, if denied, the contractor may participate as a participant or as a 
witness, based on the circumstance. (See Role of Witness section for additional 
information). 
  As a party, the contractor is able to orally participate in the hearing and may file position 
papers, call witnesses, and/or cross-examine witnesses of other parties. The contractor 
shall submit any position paper or additional evidence requested by the ALJ in 
accordance with 42 CFR 405.1012(c)(2)(i) and (ii). The contractor shall be adequately 
prepared to respond to questioning by the ALJ or other parties regarding all issues related 
to the claims under appeal. As a party to the hearing, contractors are subject to discovery 
by the other party to the hearing in accordance with 42 CFR 405.1037. 
 
For Notice of Hearings (NOHs) received that include issues deemed significant by CMS 
or the contractor, the contractor shall, at a minimum: 
 
  Invoke party status in ALJ cases per volume of ALJ cases funded for this activity;  
  Participate in any pre-ALJ hearing conference calls, as needed, with other contractors 
(as facilitated by the appropriate Qualified Independent Contractor (QIC));   
  Coordinate with Medical Director(s) or related personnel from other contractors 
intending to participate as consultants/expert witnesses, as necessary, in accordance 
with 42 CFR 405.1010(d)(3). In addition, the MAC shall coordinate with other 
contractors for those hearings in which they do not invoke party status, but decide to 
participate as a consultant/expert witness; and/or,  
  Participate in the hearings as a party via telephone, video teleconferencing, or in-
person.   
 
Role of the Witness:   
 
If the ALJ declines the request for contractor leave on a particular hearing, the 
contractor may be called as a witness by CMS or another CMS contractor that is a party 
to the hearing. A determination regarding the need for a witness by the participating 
party shall be determined by the party and communicated to the contractor prior to the 
hearing. Contractors should, at their discretion, participate as a witness in any case in 
which another CMS contractor and/or CMS has requested their support in a hearing. 
Contractors shall notify the requesting party no later than 10 days prior to the scheduled 
hearing in those instances in which contractors are unable to support the hearing as a 
witness. As a witness, contractors shall be tasked with supporting the party to the 
hearing in responding to policy or factual issues related to a particular case through direct 
examination and is subject to cross examination by the opposing party.    
 
Note: Contractors who are interested in acting as a witness may indicate their interest via 
the AdQIC Portal. CMS contractors may indicate interest in participating as a witness 
without first making a request for leave with an ALJ. Additionally, in accordance with 
42 CFR 405.1020, witness designations/elections shall be made during the coordination 
of interest/role selection process, as described below, and shall be included in the 
response to a given NOH.  
.      
3.9.1 - Election of Status 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
The contractor shall establish a process for assessing the NOHs received to determine 
which cases should be selected for participation, as well as the type of participation 
(participant, party, or witness) to be employed. Factors to be examined should include, 
but not be limited to: originator of initial denial, policy implications, dollars at issue, 
program integrity matters, and the extent to which a particular issue is, or has been, a 
recurring issue at the ALJ level of appeal. 
 
Contractors shall, for those cases in which they were the medical reviewer issuing the 
denial subject to appeal, have a prioritized ability to invoke party status (in lieu of other 
appeals support contractors). This process is further described below. 
 
A.  Election of Participation Status Prior to Receipt of a Formal NOH 
 
The election to participate as a participant shall be made consistent with 42 CFR 
405.1010 and can be done either prior to receipt of a formal NOH or after the receipt of 
a formal NOH. 
 
The regulations allow CMS contractors to elect to participate as a participant before 
issuance and/or receipt of the formal NOH. See section of 42 CFR 405.1010(b)(1) for 
additional information. If the contractor elects to participate before the receipt of the 
NOH, it shall send written notice of its intent to the assigned ALJ or attorney adjudicator, 
or the designee of the Chief ALJ, if no contact assigned yet, and to all parties on the 
reconsideration (per the prescribed OMHA process) within 30 calendar days after 
notification that a request for hearing had been filed. In accordance with the regulations, a 
position paper or written testimony must either be submitted within 14 calendar days of 
an election to participate, if no hearing has been scheduled, or no later than 5 calendar 
days prior to the hearing, if a hearing is scheduled, unless the ALJ grants additional time 
to submit the position paper or written testimony. Contractors should note that there is a 
risk that the case may be later resolved by the ALJ, or an Attorney Adjudicator within the 
OMHA, without a hearing. 
 
B.  Election of Participation or Party Status Following Receipt of the 
Formal NOH 
 
The election to be a participant or a party to a hearing after receipt of the formal NOH 
shall be made consistent with 42 CFR 405.1010(b) or 42 CFR 405.1012, respectively, 
and the CMS-prescribed prioritization process, described below. If through the CMS- 
prescribed prioritization process it is determined that the contractor may act as either the 
party or a participant to a hearing, elections of participation must be sent by the 
Contractor within 10 calendar days of receipt of the NOH at the AdQIC to all parties 
listed on the NOH. Submission of a position paper, written testimony, and/or evidence 
must be submitted no later than five calendar days before the date of the scheduled  hearing. Copies of these items must also be sent to those parties listed on the NOH in 
accordance with 42 CFR 405.1010(c)(3)(ii) and 42 CFR 405.1012(c)(2)(ii). 
 
C.  CMS-prescribed Prioritization Process and AdQIC Portal for 
Providing a Response to the Formal NOH 
 
As the AdQIC is tasked with coordinating contractor interest in participation among the 
related CMS contractors and/or CMS, all NOHs will be sent directly to the AdQIC from 
the OMHA. The AdQIC, within two (2) calendar days of receipt of the formal NOH from 
OMHA, will create a record in the AdQIC portal that will generate an email notification 
to all applicable CMS contractors (e.g., DME MAC, A/B MAC, UPIC, SMRC, and/or 
RAC) notifying them that a hearing has been scheduled. 
 
Upon receipt of the formal NOH e-mail alert, all applicable CMS contractors shall log 
onto the AdQIC website, https://participation.q2a.com, to access the NOH information. 
All applicable CMS contractors shall make their elections, via the AdQIC website, within 
five (5) calendar days of the formal NOH e-mail sent date. To make an election, 
contractors must sign-in on the website (see above), and a dashboard will be available 
listing all appeals for the respective contractor that they may choose to participate in. 
 
Users can also search for appeals based on the information provided in the notification 
email. Next, the contractors shall select the applicable NOH identifier and 
complete/submit the CMS Contractor Participation Form indicating for each appeal 
whether they would like to participate as a party, participant, or witness, and/or if they 
would like to call a witness if made a party to the hearing. CMS contractors that fail to 
sign-in to the AdQIC system and make their respective participation role selections, in 
the required timeframe, may be precluded from the prioritization process. 
 
Note: Users will not be able to view the actual NOH document on the site. The web- 
site/dashboard will allow contractors to view all scheduled hearings for which they 
received an NOH. 
 
For all NOH communications (e.g., NOHs received from OMHA, NOH email alerts) 
received after standard business hours (e.g., 4:00 p.m., ET) and/or during weekends or 
business Holidays, as defined by the respective entity, the AdQIC portal is programmed 
to calculate the response time beginning with the next applicable business day [e.g., if the 
AdQIC receives the formal NOH on a Friday at 4:00 pm, the five (5) calendar day 
timeframe begins on Monday (with Monday being day zero (0))]. 
 
The AdQIC portal will evaluate all submissions received and determine which entity 
shall have the primary opportunity to participate as a party, and which entities can 
participate as participants or witnesses based on CMS prioritization logic. 
 
The anticipated prioritization for the role of party status is as follows: 
 
1)  Primary opportunity for the party role in an ALJ hearing will be  granted to the entity that conducted the initial claim denial (e.g., 
UPIC, RAC, SMRC or medical review unit within the MAC). 
2)  If the entity that issued the initial claim denial does not have 
interest in participating as a party (due to workload considerations 
or otherwise) the QIC will have the primary opportunity to 
participate as a party. 
3)  If no CMS contractors and/or CMS wish to invoke party status in 
a hearing and multiple entities wish to be a participant, the primary 
participant shall be the entity that conducted the initial claim denial 
(e.g., UPIC, RAC, SMRC, or medical review unit within the 
MAC). 
4)  If the entity that identified/conducted the initial claim denial does 
not wish to be the primary participant on the case, the QIC will 
have the next opportunity to assume this role. 
 
The AdQIC portal will review and prioritize contractor roles in a respective ALJ hearing 
(i.e., which contractor shall be the party, participants, etc.), within 2 calendar days of 
receipt of the completed Contractor Participation forms. The website will automatically 
calculate the contractors Participation Form response due date and each contractors role 
determination, and prioritize participation elections on the next calendar day after the 
contractor response timeframe expires. Participation/role designations will be sent via a 
system-generated email notification to any contractors who expressed interest in 
participation. The status of elections for a given NOH will be available on the AdQICs 
website once determinations have been made and notifications have been sent to the 
applicable CMS contractors. 
 
On rare occasion, the QIC may need to facilitate a call with the CMS and 
the related contractors to determine the roles and/or responsibilities on a 
particular hearing. 
 
Within 10 calendar days from the initial NOH receipt date, the AdQIC will reply on 
behalf of all applicable CMS contractors to the NOH and OMHA with a consolidated 
response. The consolidated response shall include a Notice of Election form for each 
applicable CMS contractor for a given NOH. 
 
In the event that OMHA issues an amended NOH, the amended NOH email will be sent 
from OMHA directly to the AdQIC. The AdQIC will alert all applicable CMS contractors 
of the amended NOH within 2 calendar days of receipt of the amended NOH email from 
OMHA. CMS contractor participation roles, as determined via the prioritization process 
in the response to the original NOH and submitted to OMHA via a Notice of Intent 
(NOI), shall remain intact following issuance of an amended NOH by OMHA. However, 
if a CMS contractor wishes to change their method of participation following the receipt 
of an amended NOH, then the CMS contractor shall notify/work with the AdQIC and 
OMHA, as applicable (e.g., if another CMS contractor was designated as the Party and 
the QIC was made a non-party Participant, but now the QIC wishes to serve as a Party 
following the receipt of an amended NOH, then the QIC must request leave with the  ALJ and notify the AdQIC if the request for leave is approved). 
 
D.  Communications Outside of the Portal/AdQIC Process 
 
While the AdQIC and its prioritization portal provide useful vehicles for assessing 
information transcribed from the notices of hearing received from OMHA and providing 
formal response, contractors are reminded of regulatory communications that occur 
outside of this process. 
 
Contractors are reminded that the AdQIC portal and prioritization process is initiated by 
receipt of an NOH from OMHA. Therefore, Contractors electing status prior to receipt of 
an NOH shall follow the regulatory process (outlined in 42 CFR 405.1010) to alert 
OMHA and other parties that were sent a copy of the notice of reconsideration of their 
intent to participate, which occurs outside of the portal. 
 
In accordance with section of 42 CFR 405.1010(b)(2) and (3), if a contractor elects to 
participate in an ALJ hearing, the contractor (not the AdQIC) shall provide written notice 
of its intent to participate to the parties who were sent a copy of an NOH. Failure to 
notify the other parties to the appeal, of the intent to participate, may result in the ALJ 
determining the contractors election for a given NOH invalid. This requirement remains 
applicable in the event of an amended NOH, and contractors shall ensure compliance. All 
pertinent information (e.g. party names, mailing address) will be available in the portal 
for a given NOH. 
 
Additionally, CMS contractors participating or taking party status shall provide copies of 
all submitted position papers, written testimony, and/or evidence to the ALJ and other 
appropriate parties within the time frames as set forth in 42 C.F.R. sections 405.1010, 
405.1012, or 423.2010, as applicable. Failure to provide copies of submitted position 
papers, written testimony, and/or evidence within the required timeframe will result in the 
submissions not being considered by the respective ALJ. Providing copies of all 
submitted position papers, written testimony, and/or evidence to the appropriate parties 
remains applicable in the event an amended NOH is issued and contractors shall ensure 
compliance. 
 
If a contractor requests leave to the ALJ, or formally requests the ALJ to grant the 
contractor the right to be a secondary party to the hearing, this process occurs outside of 
the portal. 
 
The ALJ sets the hearing date, time, and method by video teleconferencing (VTC), 
telephone, or in-person if VTC is not available or special circumstances exist. A party 
may object in writing to the time and place of the hearing, as soon as possible before the 
originally scheduled time but no later than 5 calendar days prior to the hearing, and 
include the reason for the objection along with a proposed alternative date and time. In 
addition, a party may request an in-person hearing by notifying the ALJ in writing and 
following the same procedures noted above for an objection to the time/place of the  hearing. The ALJ may reschedule if good cause is established per 42 CFR 405.1020(f) 
or (g). 
3.9.2 - Coordination of the ALJ Hearing 
(Rev. 748, Issued: 10-13-17; Effective: 11-14-17; Implementation: 11-14-17) 
 
As needed, if multiple entities are participating in a hearing as a party, participant, or 
witness, the QIC will set up a brief pre-hearing conference call to discuss the respective 
entitys participation in the case, roles and responsibilities, etc.  Examples in which this 
may be necessary include high dollar cases, extrapolated overpayments, policy 
implications, and/or fraud related cases, etc.  
 
Pre-hearing briefing topics may include: coordination with OMHA on scheduling 
matters, the manner of participation, coordination on position papers or other written 
testimony submitted, and lessons learned from participation in the ALJ process.   
 
There may be cases in which testimony from another contractor is necessary.  The 
contractor may call those entities as a witness only if the contractor has declared party 
status.  However, if the contractor submits a position paper as a participant, the contractor 
may collaborate with other contractors and document their views on the case in the 
paperalthough only one contractor may typically participate via the hearing.   
 
The contractor shall establish a single point of contact for ALJ offices on administrative 
matters involving notifications, scheduling, information sharing, and other coordination 
necessary between the ALJ, the appellant, and other contractors. 
 
3.10  Prior Authorization 
(Rev. 876; Issued: 04-12-19; Effective: 05-13-19; Implementation: 05-13-19) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a 
beneficiary's Medicare identification number. For purposes of this manual, Medicare 
beneficiary identifier references both the Health Insurance Claim Number (HICN) and 
the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition 
period and after for certain business areas that will continue to use the HICN as part of 
their processes. 
 
A.  Overview 
 
Prior authorization is a process through which a request for provisional affirmation of 
coverage is submitted to CMS or its contractors for review before the item or service is 
furnished to the beneficiary and before the claim is submitted for processing.  It is a 
process that permits the submitter (e.g., provider, supplier, beneficiary, etc.) to send in 
medical documentation in advance of providing and billing for an item or service, to 
verify its eligibility for Medicare claim payment.  Contractors shall, at the direction of 
CMS or other authorizing entity, conduct prior authorizations and alert the submitter of 
any potential issues with the information, as submitted. 
  For any item or service to be covered by Medicare it must: 
 
  Be eligible for a defined Medicare benefit category, 
 
  Be medically reasonable and necessary for the diagnosis or treatment of illness or 
injury or to improve the functioning of a malformed body member, and 
 
  Meet all other applicable Medicare coverage, coding and payment requirements. 
 
Contractors shall communicate to the submitter (and beneficiary upon request) their prior 
authorization decision and the assigned unique tracking number (UTN), which indicates 
that the submitter requested a prior authorization, for corresponding claim submissions. 
 
For certain prior authorization programs, the requirement to prior authorize is a condition 
of payment, as further described in the sections below. 
 
Absent any explicit CMS instruction to the contrary, submitters may correct identified 
issues with their prior authorization request(s) and resubmit their request(s) for prior 
authorization without restriction.  Contractors shall conduct prior authorization reviews 
within the timeframes defined by CMS in the corresponding prior authorization program 
operational instruction(s). 
 
The prior authorization process is further described in following sections. 
 
B.  Condition of Payment 
 
Contractors shall determine if the requirement to prior authorize a particular item or 
service is a condition of payment, as specified in the individual operational instruction(s).  
If prior authorization is a condition of payment, claims submitted without an indication 
that the submitter made a prior authorization request (i.e., UTN) shall be denied upon 
receipt. 
 
C.  Outreach and Education 
 
Contractors shall educate stakeholders each time a new prior authorization program is 
launched for a particular item or service, the requisite information and timeframes for 
prior authorization submissions, and the vehicle(s) for submitting such information to the 
contractor for assessment.  Contractors shall make sure submitters are aware of the 
timeframes for contractors to render prior authorization decisions, for each individual 
prior authorization program. 
 
Each prior authorization program will have an associated Operational Guide and will be 
available on the CMS website.  Contractors shall, at a minimum, provide public access to 
agency-developed prior authorization operational guides, by posting the link(s) on their 
website. 
  Contractors shall hold group or individualized training sessions, as appropriate, to notify 
the stakeholders of upcoming prior authorization programs and to make sure there is 
ongoing understanding of the specific requirements for those applicable prior 
authorization programs. 
 
D.  Prior Authorization Submission 
 
Contractors shall assess the information/documentation included in the prior 
authorization submission for completeness.  Requisite information for individualized 
prior authorization programs will be included in the operational guides, and shall be 
available on the CMS website. 
 
Requisite information may include, but is not limited to: 
 
  Beneficiary Information (i.e., name, Medicare beneficiary identifier, date of birth) 
 
  Physician/Practitioner Information (i.e., name, provider identification number, 
address) 
 
  Supplier Information (i.e., name, national supplier clearinghouse (NSC) number, 
identification number, address) 
 
  Documentation from the medical record to support the medical necessity of the 
item or service, and  
 
  Any other relevant documents as deemed necessary by the contractor to process 
the prior authorization. 
 
E.  Prior Authorization Decisions 
 
Contractors shall notify the submitter if their prior authorization submission results in a 
provisional affirmative, or non-affirmative decision. 
 
  A provisional affirmative decision is a preliminary finding that a future claim 
submitted to Medicare for the item or service likely meets Medicares coverage, 
coding, and payment requirements. 
 
  A non-affirmative decision is a finding that the submitted 
information/documentation does not meet Medicares coverage, coding, and 
payment requirements, and if a claim associated with the prior authorization is 
submitted for payment, it would not be paid.  Contractors shall provide 
notification of the reason(s) for the non-affirmation, if a request is non-
affirmative, to the submitter.  If a prior authorization request receives a non-
affirmative decision, the prior authorization request can be resubmitted an 
unlimited number of times, unless otherwise specified. 
  Contractors shall send detailed decision letters to submitters.  As appropriate for the 
given prior authorization program, contractors shall send detailed decision letters to other 
stakeholders (e.g., beneficiaries) using their official address on file.  In addition, there 
may be certain prior authorization programs that require the contractors to notify the 
appropriate entity by other means, such as telephone. 
 
If a claim is submitted for payment without an affirmative prior authorization decision on 
file, contractors shall use their existing processes to either suspend claims for additional 
review or to process claims as denials, based on each individualized prior authorization 
program, as detailed in the operational instruction. 
 
F.  Expedited Request 
 
For certain items or services, delays in receipt of a prior authorization decision could 
jeopardize the life or health of the beneficiary.  Contractors shall, for such items or 
services, expedite their decisions based on the operational instruction. 
 
If the claim processing systems would unavoidably delay the delivery of the UTN in an 
expedited fashion, contractors shall nonetheless render an affirmative or non-affirmative 
decision to the submitter within the mandated, expedited timeframe.  Contractors shall 
alert the submitter that the decision is being provided as expediently as possible, so that 
the item or service may be provided, but that the submitter should hold their claim and 
not submit it until such time as the UTN is received (in order to avoid a claims payment 
denial). 
 
3.10.1 - Prior Authorization Program for Certain DMEPOS 
(Rev. 937; Issued: 01-31-20; Effective: 03-02-20; Implementation: 03-02-20) 
 
A prior authorization program for certain DMEPOS items that are frequently subject to 
unnecessary utilization is described in 42 CFR 405 and 414.234.  Among other things, 
these sections establish a Master List of certain DMEPOS items meeting inclusion 
criteria and potentially subject to prior authorization.  CMS will select Healthcare 
Common Procedure Coding System (HCPCS) codes from the Prior Authorization 
Master List that shall require prior authorization, at its discretion.  In selecting HCPCS 
codes, CMS may consider factors such as geographic location, item utilization or cost, 
system capabilities, emerging trends, vulnerabilities identified in official agency reports, 
or other analysis, and may implement prior authorization nationally or locally. 
 
The Prior Authorization Master List is the list of DMEPOS items that have been 
identified using the inclusion criteria described in 42 CFR 414.234.  The Master List can 
be found on the CMS website. 
 
The Required Prior Authorization List is the items selected from the Prior Authorization 
Master List to be implemented in the Prior Authorization Program.  The Required Prior  Authorization List can be found on the CMS website, and will be updated as additional 
codes are selected for prior authorization. 
 
CMS may elect to exempt suppliers from prior authorization program upon 
demonstration of compliance with Medicare coverage, coding, and payment rules. 
 
The CMS may suspend prior authorization requirements generally or for a particular 
item or items at any time and without undertaking rulemaking.  CMS provides 
notification of the suspension of the prior authorization requirements via(i) Federal 
Register notice; and (ii) Posting on the CMS prior authorization Web site. 
 
3.10.1.1- Voluntary Prior Authorization (PA) for DMEPOS Accessories 
 (Rev: 12056; Issued: 05-25-23; Effective: 06-26-23; Implementation: 06-26-23) 
 
The 2019 ESRD and DMEPOS final rule (84 Fed. Reg. 60648 (Nov. 8, 2019)) permits 
CMS to develop a program to allow suppliers to voluntarily include certain accessories 
on prior authorization requests submitted for items on the Required Prior 
Authorization List. These accessories may receive a prior authorization decision for 
operational simplicity, even if the accessory itself is not on the Required Prior 
Authorization List. Voluntarily submitting a prior authorization request for accessories 
does not create a condition of payment and is not mandatory. 
 
Prior authorization requests for accessories must include a corresponding item on the 
Required Prior Authorization List; otherwise, the prior authorization request for the 
accessory will be rejected. Accessories submitted on a prior authorization request 
where the corresponding item on the Required Prior Authorization List is non-affirmed 
will also be non-affirmed.  
 
The list of DME items that require prior authorization can be found on  Required Prior 
Authorization List, and the list of selected accessories that can be voluntarily added to 
prior authorization requests can be found on the Voluntary Prior Authorization List. 
The Required Prior Authorization List and the Voluntary Prior Authorization List will 
be updated as additional codes are selected. 
 
For more information, please see the CMS DMEPOS Prior Authorization website. 
 
3.10.2 - Prior Authorization Process for Certain Hospital Outpatient 
Department (OPD) Services 
(Rev. 937; Issued: 01-31-20; Effective: 03-02-20; Implementation: 03-02-20) 
 
A prior authorization process for certain hospital OPD services is described in 42 CFR 
419.80 through 419.89 as a method for controlling unnecessary increases in the 
volume of covered services.  These sections establish requirements for the submission 
of a prior authorization request (PAR), the timeframes for the review of a PAR, and the 
process for CMS to exempt providers from prior authorization requirements.     
The list of hospital OPD services requiring prior authorization will be updated through 
formal notice-and-comment rulemaking.  Technical updates to the list of services, 
such as changes to the name of the service or the HCPCS code, will be published on 
the CMS website. 
 
The CMS may elect to exempt a provider from this prior authorization process upon a 
providers demonstration of compliance with Medicare coverage, coding, and payment 
rules after semiannual assessments.  Providers must reach a prior authorization 
provisional affirmation threshold of 90 percent or greater to be eligible for exemption. 
 
The CMS may suspend the outpatient department services prior authorization process 
requirements generally or for a particular service(s) at any time by issuing notification 
on the CMS website. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
            Transmittals Issued for this Chapter 
 
Rev #  Issue Date  Subject  Impl Date  CR# 
R12056PI  05/25/2023  Update to Chapter 3 of Publication (Pub.)  06/26/2023 13185 
100-08 (Program Integrity Manual (PIM)) 
for the Voluntary Prior Authorization (PA) 
Process for Durable Medical Equipment, 
Prosthetics, Orthotics, Supplies (DMEPOS) 
Accessories 
 
R11933PI  03/30/2023  Update to Process and Responsibility for  04/03/2023 12281 
Tracking Medicare Contractors' Prepayment 
and Post Payment Reviews in the RAC Data 
Warehouse (RACDW) 
R11697PI  11/09/2022  Update to Process and Responsibility for  04/03/2023 12881 
Tracking Medicare Contractors' Prepayment 
and Post Payment Reviews in the RAC Data 
Warehouse (RACDW)- Rescinded and 
Replaced by Transmittal 11933 
R11529PI  07/28/2022  Update of Chapter 3 in Publication (Pub.)  08/30/2022 12827 
100-08, Including Update to Medicare 
Program Integrity Contractor Post-Payment 
Review Process, and Update of Chapter 8 
Pub. 100-08, Including Revision to When 
Contractor Suspects Additional Improper 
Claims 
R11032PI  09/30/2021  Updates to Chapters 1, 3, 4, 5, 8 and 9 of  11/10/2021 12375 
Publication (Pub.) 100-08 
R10984PI  09/09/2021  Updates to Chapters 1, 3, 4, 5, 8 and 9 of  11/10/2021 12375 
Publication (Pub.) 100-08 - Rescinded and 
Replaced by Transmittal 11032 
R10365PI  10/02/2020  Updates to Chapters 1, 2, 3, 4, 5, 6, 7, 8, 10,  08/27/2020 11884 
11, and Exhibits of Publication (Pub.) 100-08 
R10228PI  07/27/2020  Updates to Chapters 1, 2, 3, 4, 5, 6, 7, 8, 10,  08/27/2020 11884 
11, and Exhibits of Publication (Pub.) 100-08 
Rescinded and Replaced by Transmittal 
#10365 
R10197PI  06/26/2020  Publication (Pub.) 100-08 Chapter 3 Updates  07/27/2020 11730 
to Section 3.2.3.2 (Timeframes for 
Submission) and Section 3.2.3.8 (No 
Response or Insufficient Response to 
Additional Documentation Requests  Rev #  Issue Date  Subject  Impl Date  CR# 
(ADRs)) 
R10190PI  06/19/2020  Revising Chapters 3 and 5 of Publication  07/01/2020 11599 
(Pub.) 100-08, to Reflect the Recent Final 
Rule CMS-1713-F 
R10171PI  06/12/2020  Updates to Durable Medical Equipment,  07/13/2020 11763 
Prosthetics, Orthotics & Supplies 
(DMEPOS) and Ambulance Certification 
Signature Requirements 
R10132PI  05/15/2020  Revising Subsection 3.2.5, Targeted Probe  06/16/2020 11695 
and Educate (TPE), in Chapter 3 of 
Publication (Pub.) 100-08 
R10100PI  05/08/2020  Revision to Language in Chapter 3, Section  06/09/2020 11756 
3.7.5 (Corrective Action Reporting 
Requirements) of Publication (Pub.) 100-08 
R937PI  01/31/2020  Updates to the Prior Authorization (PA)  03/02/2020 11633 
Guidance Within Publication (Pub.) 100-08 
R933PI  01/10/2020  Update to Chapter 3, Section 3.2.3.1  01/06/2020 10828 
Additional Documentation Requests (ADR) 
of Publication (Pub) 100-08 
R912PI  10/18/2019  Medicare Administrative Contractor (MAC)  11/19/2019 11463 
Verification of Potential Errors and 
Corrective Actions Taken 
R907PI  10/04/2019  Update to Chapter 3, Section 3.2.3.1  01/06/2020 10828 
Additional Documentation Requests (ADR) 
of Publication (Pub) 100-08- Rescinded and 
Replaced by Transmittal #933 
R902PI  09/27/2019  Updates to Chapters 3, 4, 8, 15, and Exhibits  10/28/2019 11425 
of Publication (Pub.) 100-08 
R876PI  04/12/2019  Update to Publication (Pub.) 100-08 to  05/13/2019 11109 
Provide Language-Only Changes for the 
New Medicare Card Project 
R853PI  01/04/2019  Updates to the Appeals Prioritization Process 02/05/2019 10641 
R833PI  10/12/2018  Templates in Medical Review  11/13/2018 10930 
R825PI  09/21/2018  Credentials of Reviewers (This Change  10/22/2018 10909 
Request (CR) Rescinds and Fully Replaces 
CR 10157.) 
R819PI  08/17/2018  Adding a Targeted Probe and Educate (TPE)  09/17/2018 10876 
Sub-Section Into Section 3.2 of Chapter 3 in  Rev #  Issue Date  Subject  Impl Date  CR# 
Publication (Pub.) 100-08 
R796PI  05/11/2018  Intent to Reopen  08/13/2018 9855 
R802PI  06/21/2018  Use of Accessible and Applicable Claims  07/24/2018 10640 
  History During Medical Review 
R791PI  04/27/2018  Restoring Section 3.2.3 B. and Section 3.2.3  05/29/2018 10505 
C. to Chapter 3 of Publication (Pub.) 100-08 
in the Internet Only Manual (IOM) 
R786PI  04/13/2018  Reimbursing Providers and Health  05/14/2018 10529 
Information Handlers (HIHs) for Additional 
Documentation 
R768PI  02/08/2018  Post-Payment Review Timeliness  04/01/2018 9990 
Requirements 
R755PI  11/09/2017  Tracking Medicare Contractors' Prepayment  12/11/2017 10177 
and Postpayment Reviews 
R751PI  10/20/2017  Clarifying Signature Requirements  11/20/2017 10322 
R748PI  10/13/2017  Defending Medical Review Decisions at  11/14/2017 10226 
Administrative Law Judge (ALJ) Hearings 
R738PI  08/18/2017  Provider Error Rate Formula  09/19/2017 10210 
R732PI  07/21/2017  Clarifying the Instructions for Amending or  08/22/2017 10120 
Correcting Entries in Medical Records 
R721PI  06/09/2017  Elimination of Routine Reviews Including  07/11/2017 9809 
Documentation Compliance Reviews and 
Instituting Three Medical Reviews 
R713PI  05/05/2017  Scribe Services Signature Requirements  06/06/2017 10076 
R698PI  01/20/2017  The Process of Prior Authorization  02/21/2017 9940 
R674PI  09/02/2016  Duplicate Postpayment Claim Reviews  11/04/2016 9665 
R663PI  07/15/2016  Denial Codes for Missing or Insufficient  08/16/2016 9690 
Documentation 
R657PI  06/17/2016  Special Provisions for Lab Additional  07/18/2016 9670 
Documentation Requests (ADRs) 
R634PI  01/22/2016  Reviewers' Credentials, Notifying the  04/22/2016 9333 
Provider, CARC Code Update 
R628PI  12/04/2015  Update to CMS Publication 100-08, Chapter  01/06/2016 9438 
3, Section 3.2.3.2 (Time Frames for 
Submission) 
R620PI  10/16/2015  Pub. 100-08 Chapter 3 Updates: Section  11/17/2015 9226 
3.2.3.2 Timeframes for Submission and 
Section 3.2.3.8 - No response to Additional  Rev #  Issue Date  Subject  Impl Date  CR# 
Documentation Requests  Rescinded and 
not replaced 
R617PI  10/09/2015  Update to Chapter 3 of Pub. 100-08  11/10/2015 9303 
R615PI  10/02/2015  Signature Requirements  11/02/2015 9332 
R613PI  09/25/2015  Postpayment Review Requirements  10/26/2015 9323 
R608PI  08/14/2015  Update to Pub. 100-08 to Provide Language- 09/14/2015 8747 
Only Changes for Updating ICD-10 and 
ASC X12 
R604PI  07/24/2015  Signature Requirements  08/25/2015 9225 
R585PI  04/03/2015  Coding Determinations  05/04/2015 8937 
R568PI  02/04/2015  Review Timeliness Requirements for  03/01/2015 8443 
Complex Review 
R567PI  02/04/2015  New Timeframe for Response to Additional  04/06/2015 8583 
Documentation Requests 
R566PI  01/07/2015  New Timeframe for Response to Additional  04/06/2015 8583 
Documentation Requests  Rescinded and 
replaced by Transmittal 567 
R565PI  12/31/2014  Update to CMS Publication 100-08, Chapter  02/02/2015 9012 
3, Section 3.2.3.2 (Time Frames for 
Submission) 
R557PI  11/26/2014  Update to CMS Publication 100-08, Chapter  12/29/2014 8948 
3, Section 3.2.3.4 (Additional 
Documentation Request Required and 
Optional Elements) 
R554PI  11/14/2014  New Timeframe for Response to Additional  04/06/2015 8583 
Documentation Requests  Rescinded and 
replaced by Transmittal 566 
R547PI  10/17/2014  Review Timeliness Requirements for  02/24/2015 8443 
Complex Review  Rescinded and replaced 
by Transmittal 566 
R543PI  09/26/2014  Defending Medical Review Decisions at  10/27/2014 8501 
Administrative Law Judge (ALJ) Hearings 
R541PI  09/12/2014  Claims that are Related  09/08/2014 8802 
R540PI  09/04/2014  Claims that are Related  Rescinded and  09/08/2014 8802 
replaced by Transmittal 541 
R534PI  08/08/2014  Claims that are Related  Rescinded and  09/08/2014 8802 
replaced by Transmittal 540 
R527PI  07/03/2014  Provider Notice on MAC Web sites  09/05/2014 8690  Rev #  Issue Date  Subject  Impl Date  CR# 
R523PI  04/20/2014  Update to CMS Pub. 100-08, Chapter 3   07/22/2014 8791 
Rescinded and not replaced 
R512PI  04/18/2014  Revision to the Program Integrity Manual,  05/19/2014 8716 
Chapter 3 Section 3.3 
R505PI  02/05/2014  Removing Prohibition - Rescinded  03/06/2014 8425 
R501PI  01/09/2014  Complex Medical Review  10/07/2013 8429 
R500PI  12/27/2013  Third-party Additional Documentation  01/28/2014 8547 
Request CERT Update 
R498PI  12/27/2013  Notifying the Provider of Postpayment  01/28/2014 8541 
Review Results 
R496PI  12/12/2013  Tracking Medicare Contractors' Postpayment 10/03/2013 8362 
Reviews 
R489PI  10/18/2013  100% Prepayment Review and Random  11/19/2013 8427 
Review Instructions 
R488PI  09/20/2013  Acceptable Submission Methods for  10/21/2013 8436 
Responses to ADRs 
R487PI  09/13/2013  Tracking Medicare Contractors' Postpayment 10/03/2013 8362 
Reviews 
R486PI  09/06/2013  Complex Medical Review  Rescinded and  10/07/2013 8429 
replaced by Transmittal 501 
R485PI  08/21/2013  Program Safeguard Contractor (PSC) and  01/29/2013 8079 
Zone Program Integrity Contractor (ZPIC) 
Provider Notification 
R484PI  08/21/2013  OMB Collection Number  05/21/2012 7750 
R477PI  08/02/2013  Tracking Medicare Contractors' Postpayment 10/03/2013 8362 
Reviews  Rescinded and replaced by 
Transmittal 487 
R465PI  05/17/2013  Use of a Rubber Stamp for Signature  06/18/2013 8219 
R464PI  05/17/2013  Reopening Claims with Additional  06/18/2013 8267 
Information or Denied due to Late or No 
Submission of Requested Information 
R458PI  04/12/2013  EsMD RC Public Announcement  05/13/2013 8208 
R455PI  03/15/2013  Progress Notes and Forms  12/10/2012 8033 
R453PI  03/13/2013  Progress Notes and Forms  Rescinded and  12/10/2012 8033 
replaced by Transmittal 455 
R447PI  01/18/2013  Medical Review Timeliness Requirements  02/19/2013 8131 
R446PI  12/28/2012  Program Safeguard Contractor (PSC) and  01/29/2013 8079 
Zone Program Integrity Contractor (ZPIC)  Rev #  Issue Date  Subject  Impl Date  CR# 
Provider Notification  Rescinded and 
replaced by Transmittal 485 
R442PI  12/07/2012  Update for Amendments, Corrections and  01/08/2013 8105 
Delayed Entries in Medical Documentation 
R438PI  11/09/2012  Progress Notes and Forms  Rescinded and  12/10/2012 8033 
replaced by Transmittal 453 
R426PI  06/15/2012  Process for Handling Electronic Submission  07/16/2012 7835 
of Medical Documentation (esMD) 
R422PI  05/25/2012  Request Records Related to the Claim Being  06/26/2012 7837 
Reviewed 
R418PI  04/20/2012  OMB Collection Number  Rescinded and  05/21/2012 7750 
replaced by Transmittal 484 
R399PI  11/04/2011  Revision of PIM Chapter 3, Section 3.2.1  12/05/2011 7622 
Setting Priorities and Targeting Reviews 
R398PI  11/04/2011  Revision of PIM Chapter 3, Section 3.7.5,  12/05/2011 7479 
Part B, Corrective Action Reporting on CMS 
and OIG Identified Vulnerabilities 
Spreadsheet Submission Instructions 
R396PI  11/02/2011  Medical Review of PWK (paperwork)  04/02/2012 7330 
R383PI  08/26/2011  Update to Pub. 100-08, Medicare Program  09/26/2011 7536 
Integrity Manual-Chapter 3 
R377PI  05/27/2011  Program Integrity Manual Reorganization of  06/28/2011 6560 
Chapters 3 and 8 
R367PI  02/25/2011  Use of Claims History Information in Claim  03/25/2011 7305 
Payment Determination 
R366PI  02/04/2011  Auto Denial of Claim Line(s) Items  07/05/2011 7228 
Submitted with a GZ Modifier 
R360PI  12/10/2010  Corrective Action Reporting  01/12/2011 7241 
R343PI  06/18/2010  Medical Review Resolutions in the Absence  07/19/2010 6982 
of a Plan of Care (POC) and the Outcome 
Assessment Information Set (OASIS) 
R338PI  05/14/2010  Clinical Review Judgment (CRJ)  06/15/2010 6954 
R327PI  03/16/2010  Signature Guidelines for Medical Review  04/16/2010 6698 
Purposes 
R303PI  09/25/2009  Local Coverage Determinations (LCD)  10/13/2009 6586 
Exceptions - Rescinded 
R302PI  09/11/2009  Local Coverage Determinations (LCD)  10/13/2009 6586 
Exceptions - Rescinded and replaced by 
Transmittal 303  Rev #  Issue Date  Subject  Impl Date  CR# 
R282PI  01/08/2009  Zone Program Integrity Contractor (ZPIC)  01/26/2009 6170 
Updates 
R278PI  12/19/2008  Zone Program Integrity Contractor (ZPIC)  01/26/2009 6170 
Updates - Rescinded and replaced by 
Transmittal 282 
R264PI  08/07/2008  Transition of Responsibility for Medical  08/15/2008 5849 
Review From Quality Improvement 
Organizations (QIOs) 
R248PI  03/28/2008  Signature Requirements Clarification  04/28/2008 5971 
R245PI  02/29/2008  Processing Part B Therapy Claims While the  03/31/2008 5945 
Therapy Cap Exceptions Process is in Effect 
R220PI  08/24/2007  Various Medical Review Clarifications  09/03/2007 5550 
R185PI  01/26/2007  Updating Financial Reporting Requirements  02/26/2007 4378 
for Workload and Cost Associated With the 
Return of Demand Bills 
R184PI  01/26/2007  Revisions for MACs and PSCs  02/26/2007 5399 
R181PI  12/29/2006  Outpatient Therapy Cap Exceptions Process  01/29/2007 5478 
for Calendar Year (CY) 2007 
R179PI  12/15/2006  Revised Medical Review Timeliness and  01/16/2007 5252 
Reopening Requirements for Medical 
Review 
R174PI  11/17/2006  Transition of Medical Review Educational  10/06/2006 5275 
Activities 
R171PI  11/09/2006  Outpatient Therapy Cap Clarifications  12/09/2006 5271 
R170PI  11/03/2006  Transition of Medical Review Educational  10/06/2006 5275 
Activities  Replaced by Transmittal 174 
R167PI  10/27/2006  New DMEPOS Certificates of Medical  10/01/2006 4296 
Necessity (CMNs) and DME  
Information Forms (DIFS) for Claims 
Processing 
R163PI  09/29/2006  Transition of Medical Review Educational  10/06/2006 5275 
Activities  Replaced by Transmittal 170 
R159PI  09/22/2006  New DMEPOS Certificates of Medical  10/02/2006 4296 
Necessity (CMNs) and DME  
Information Forms (DIFS) for Claims 
Processing - Replaced by Transmittal 167 
R149PI  06/30/2006  Notification to Providers, Suppliers, and  07/31/2006 5115 
Beneficiaries of Postpayment Review 
Results  Rev #  Issue Date  Subject  Impl Date  CR# 
R142PI  03/02/2006  New DMEPOS Certificates of Medical  10/02/2006 4296 
Necessity (CMNs) and DME MAC 
Information Forms (DIFS) for Claims 
Processing  Replaced by Transmittal 159 
R140PI  02/15/2006  Therapy Caps Exception Process  03/13/2006 4364 
R139PI  02/13/2006  Therapy Caps Exception Process - Replaced  03/13/2006 4364 
by Transmittal 140 
R138PI  02/10/2006  New DMEPOS Certificates of Medical  10/03/2006 4296 
Necessity (CMNs) and DME MAC 
Information Forms (DIFS) for Claims 
Processing - Replaced by Transmittal 142 
R135PI  01/06/2006  Changes to the GTL Titles  02/06/2006 4228 
R131PI  10/10/2005  Medical Review Matching of Electronic  02/10/2006 4052 
Claims and Additional Documentation in the 
Medical Review Process 
R125PI  09/30/2005  Medical Review Additional Documentation  12/30/2005 4022 
Requests 
R123PI  09/23/2005  MMA Section 935  10/24/2005 3703 
R122PI  09/16/2005  Medical Review Collection Number  10/17/2005 4091 
Requirements 
R120PI  08/25/2005  Correction to Change Request (CR) 3222:  N/A  3880 
Local Medical Review Policy/ Local 
Coverage Determination Medicare Summary 
Notice (MSN) Message Revision 
R118PI  08/12/2005  Various Benefit Integrity (BI) Clarifications  09/12/2005 3896 
R114PI  06/10/2005  Change in Statistical Sampling Instructions  05/31/2005 3734 
R108PI  04/29/2005  Change in Statistical Sampling Instructions  05/31/2005 3734 
R100PI  01/21/2005  Review of Documentation During Medical  02/22/2005 3644 
Review 
R098PI  01/21/2005  Psychotherapy Notes  02/22/2005 3457 
R096PI  01/14/2005  Consent Settlements  02/14/2005 3626 
R094PI  01/14/2005  Informing Beneficiaries About Which Local  07/05/2005 3602 
Medical Review Policy (LMRP) and/or 
Local Coverage Determination (LCD) and/or 
National Coverage Determination (NCD) is 
Associated with Their Claim Denial 
R091PI  12/10/2004  Revision of Program Integrity Manual  01/03/2005 3560 
(PIM), Section 3.11.1.4 
R090PI  12/10/2004  Prepayment Review of Claims for MR  01/10/2005 3569  Rev #  Issue Date  Subject  Impl Date  CR# 
Purposes 
R087PI  11/05/2004  Informing Beneficiaries About Which Local  04/04/2005 3363 
Medical Review Policy (LMRP) and/or 
Local Coverage Determination (LCD) and/or 
National Coverage Determination (NCD) is 
Associated with Their Claim Denial 
R086PI  11/05/2005  Payment for Emergency Medical Treatment  11/22/2004 3437 
and Labor Act (EMTALA) - Mandated 
Screening and Stabilization Services 
R85PI  10/22/2004  Informing Beneficiaries About Which Local  04/04/2005 3363 
Medical Review Policy (LMRP) and/or 
Local Coverage Determination (LCD) and/or 
National Coverage Determination (NCD) is 
Associated with Their Claim Denial - 
Replaced by Transmittal 87 
R084PI  10/22/2004  Payment for Emergency Medical Treatment  11/22/2004 3437 
and Labor Act (EMTALA) - Mandated 
Screening and Stabilization Services - 
Replaced by Transmittal 86 
R079PI  07/09/2004  Local Medical Review Policy/ Local  08/09/2004 3222 
Coverage Determination Medicare Summary 
Notice (MSN) Message Revision; Denial 
Notices 
R076PI  05/28/2004  Clarification of Complex Medical Review  06/28/2004 3211 
R075PI  05/14/2004  Informing Beneficiaries About Which Local  10/04/2004 3089 
Medical Review Policy (LMRP) and/or 
Local Coverage Determination (LCD) and/or 
National Coverage Determination (NCD) is 
Associated with Their Claim Denial 
R072PI  04/16/2004  Automated Prepayment Review  05/01/2004 3088 
R071PI  04/09/2004  Rewrite of Program Integrity Manual (except 05/10/2004 3030 
Chapter 10) to Apply to PSCs 
R070PI  04/09/2004  New Requirements for Self-Administered  05/10/2004 3136 
Drug (SAD) Exclusion List Articles in the 
Medicare Coverage Database (MCD) 
R066PI  02/20/2004  Progressive Corrective Action Program  04/02/2004 3124 
Memorandum and Updated Instructions on 
How Contractors Must Identify, Verify, and 
Correct Billing Errors 
R064PI  01/30/2004  Role Conditions of Participation (COPs)  03/02/2004 3042 
Requirements When Making a Payment  Rev #  Issue Date  Subject  Impl Date  CR# 
Decision 
R059PI  11/28/2003  Documentation Specifications for Areas  01/05/2004 2937 
Selected for Prepayment or Postpayment MR 
R054PI  10/31/2003  Denial Notices  04/05/2004 2936 
R053PI  10/31/2003  Prepayment Edits  04/05/2004 2916 
R049PI  09/26/2003  Changing the Use of Remittance Advice  10/10/2003 2873 
Code N109 From Mandatory to Contractors 
Discretion 
R047PI  07/25/2003  CMS Mandated Edits  08/08/2003 2517 
R046PI  07/25/2003  Prepayment Edits  08/01/2003 2681 
R039PI  03/14/2003  MR Review and Documentation  04/01/2003 2417 
R038PI  02/03/2003  When Contractors May Publish  02/14/2003 2120 
Coverage/Coding Articles In Their Bulletins 
And Web Sites 
R035PI  11/29/2002  Types of Prepayment and Postpayment  01/01/2003 2418 
Review 
R033PI  11/01/2002  FY 2003 Budget Performance Requirements  11/01/2002 2407 
R032PI  10/25/2002  Consent Settlements, CMPs Delegated to  10/25/2002 2333 
CMS and Referrals to OIG 
R031PI  10/25/2002  Revised Prepayment Edits  09/01/2002 1793 
R017PIM  12/12/2001  Reorganizes chapter 3, sections 4, 5, and 6  04/01/2002 1891 
and Removes reference to outdated MCM 
and MIM overpayment collection 
instructions and lists the more current CFR 
citations instead. 
R016PIM  11/28/2001  Adds Various Program Memoranda for BI  11/28/2001 1732 
Requests for Information, Organizational 
Requirements, Unsolicited Voluntary Refund 
Checks, Anti-Kickback Statute Implications 
R013PIM  09/26/2001  Administrative Relief from Medical Review  09/26/2001 1879 
and Benefit Integrity in Disaster Situations 
R003PIM  11/22/2000  Complete Replacement of PIM Revision 1.  NA  1292 
R001PIM  06/2000  Initial Release of Manual  NA  931 
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