Medicare Program Integrity Manual 
Chapter 7 - MR Reports 
 
Table of Contents  
(Rev. 10365, 10-02-20) 
 
Transmittals for Chapter 7 
 
7.1  Annual Improper Payment Reduction Strategy (IPRS) 
7.1.1  General Overview 
7.1.2  IPRS Required Format 
7.1.2.1 - Cover Page 
7.1.2.2 - Overview/Executive Summary 
7.1.2.3 - Data Analysis and Information Gathering Plan 
7.1.2.4 - Prioritized Problem List 
7.1.2.4.1 - Carried Over Prioritized Problems 
7.1.2.5 - MR Activities and Improper Payment Interventions Planning 
7.1.2.5.1  Contractor Suggestions 
7.1.2.6 - Program Management 
7.1.2.6.1 - Budget and Workload Management 
7.1.2.6.1.1  Workload Reporting Tables 
7.1.2.6.2 - Staffing and Workload Management 
7.1.2.7- Quality Assurance (QA) Plan 
7.1.2.7.1 QA for Data Analysis and Information Gathering 
7.1.2.7.2 - QA for Development of the Prioritized Problem List 
7.1.2.7.3 - QA for Program Management 
7.1.3  IPRS Submission 
7.1.4  IPRS Revision 
7.2 - Medical Review Definitions 
7.2.1 - Background 
7.2.2 - Definitions 
7.2.2.1- Automated Medical Review 
7.2.2.2  Non-Medical Record Review 
7.2.2.3 - Demand Bill Claims Review 
7.2.2.4 - Medical Review Reopening 
7.2.2.5 - Prepay Provider Specific Medical Record Review 
7.2.2.6 - Prepay Service Specific Medical Record Review 
7.2.2.7 - Prepay Provider Specific Probe Medical Record Review  7.2.2.8 - Prepay Service Specific Probe Medical Record Review 
7.2.2.9 - Advanced Determination of Medicare Coverage (ADMC) 
7.2.2.10 - Postpay Provider Specific Probe Medical Record Review 
7.2.2.11 - Postpay Service Specific Probe Medical Record Review 
7.2.2.12 - Postpay Provider Specific Medical Record Review 
7.2.2.13 - Postpay Service Specific Medical Record Review 
7.2.2.14 - Data Analysis 
7.2.2.15 - Medical Review Edit Development 
7.2.2.16 - Externally Directed Reviews 
7.2.2.17 - Provider Compliance Group Directed Reviews 
7.2.2.18 - One on One Education 
7.2.3 - Coding 
7.2.4 - Monthly Reporting of Medical Review Savings 
7.3  The Strategy Analysis Report (SAR) 
7.3.1 - General Overview 
7.3.2 - SAR Required Format 
7.3.2.1 - Cover Page 
7.3.2.2 - Overview/Executive Summary 
7.3.2.3 - Prioritized Problem List 
7.3.2.4 - MR Activities and Improper Payment Interventions Planning 
7.3.2.5 - Program Management 
7.3.2.5.1 - Budget and Workload Management 
7.3.2.5.1.1. - Workload Reporting Tables 
7.3.2.5.2 - Staffing and Workload Management 
7.3.3 - Quality Assurance (QA) Plan 
7.3.4  SAR Submission 
7.3.5  SAR Revision  7.1 - Annual Improper Payment Reduction Strategy (IPRS) 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
7.1.1 - General Overview 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
The annual Improper Payment Reduction Strategy (IPRS) is a problem-focused, 
outcome-based operational plan developed by the Medicare Administrative Contractor 
(MAC) that identifies risks to the Medicare Trust Fund and describes the improper 
payment interventions to be implemented to ensure proper payments and address the 
risks.  The IPRS addresses both provider and service-specific vulnerabilities and includes 
a prioritization of the problems based on data analysis findings and the availability of 
resources. 
 
Specifically, the IPRS details: 
  Identified medical review (MR) prioritized problems 
  Data analysis for each prioritized problem 
  All MR activities, provider outreach & education (POE), and other improper 
payment interventions focused on the prioritized problems 
  Measureable and achievable improvement goals for each prioritized problem 
  Evaluation methodology for the planned goals and improper payment 
interventions 
  Quality assurance activities 
  Workload and staffing detail 
  Program management information 
 
7.1.2 - IPRS Required Format 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
All elements listed below shall be addressed by the MAC in the IPRS.  Each of these 
requirements is described in detail in the following sections:   
 
  Cover Page 
  Overview/Executive Summary 
  Data Analysis and Information Gathering Plan   
  Prioritized Problem List  
  MR Activities and Improper Payment Interventions Planning 
  Program Management 
  Quality Assurance Plan 
 
7.1.2.1 - Cover Page 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
The cover page shall include the following information:   
  MAC name and address 
  MAC contract number 
  States in jurisdiction 
  Period of performance (an explanation shall be included if the IPRS is reporting 
on a  period of performance less than 12 months) 
  Report coordinator contact information (name, telephone number and e-mail 
address) 
  IPRS due date and submission date  
 
7.1.2.2 - Overview/Executive Summary 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
The MAC shall provide a high level summary of their planned MR activities, improper 
payment interventions, and quality assurance activities for their upcoming period of 
performance. 
 
7.1.2.3 - Data Analysis and Information Gathering Plan 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
The MAC shall target their efforts on those services, items, and providers/suppliers in their 
jurisdiction that pose the greatest financial risk to the Medicare Trust Fund and that represent 
the best investment of resources to reduce the national improper payment rate (IPR). 
 
The first step in creating or updating an IPRS is to establish a priority-setting process to 
assure MR activities and other interventions are focused on areas with the greatest potential 
for improper payments.  The MACs shall analyze and gather data from a variety of sources 
for this purpose.  The MACs Comprehensive Error Rate Testing (CERT) findings shall 
be used as a primary source of data.  However, CERT findings are only one indication of 
where to focus and shall not be relied upon as the single source of data information.  The 
MAC shall consult a variety of resources.  Examples of other appropriate resources 
include, but are not limited to: 
 
  Recovery Auditor-identified problem  
  Comparative billing reports (CBRs)  
  Office of Inspector General (OIG) or Government Accountability Office (GAO) 
reports  
  MAC data analysis on a specific benefit, diagnostic/procedure code, or place of 
service. This analysis shall include an identification of  the specific cause of 
improper payments 
  Evaluation of utilization or probes 
 
The MAC shall provide detailed information of the data analysis conducted for purposes 
of developing the IPRS.  The data analysis plan shall list the data resources used in 
developing the prioritized problem list.  If a prioritized problem is carried over from a 
previous IPRS or Strategy Analysis Report (SAR) the MAC shall provide information  regarding the current, updated data analysis conducted to ensure that the prioritization of 
the problem is accurate and current.  If a former prioritized problem is not carried over 
from a previous IPRS or SAR, an explanation and data shall also be provided. 
 
7.1.2.4 - Prioritized Problem List 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
The MAC shall develop a prioritized problem list after data analysis has been completed.  
The MAC shall list five to ten prioritized problems, for each appropriate claim type 
(Durable Medical Equipment, Prosthetics, Orthotics, & Supplies (DMEPOS), Part A, Part 
B, and Home Health and Hospice (HHH)), selected for inclusion in the IPRS. 
 
The MAC shall describe the method, criteria, and data analysis used to prioritize the 
problem list.  The MAC shall consider their resources and other operational areas of the 
MAC with similar goals when developing the prioritized problem list. 
 
The prioritized problem list shall include the identified payment errors/vulnerabilities that 
can be addressed through MR activities, POE, and other improper payment interventions.  
The MR problems for the current contract year, as well as problems that are carried over 
from the previous IPRS or SAR, shall be included.  Any prioritized problems carried over 
from a previous IPRS or SAR shall include an explanation. The MAC shall also include a 
rationale if top errors identified by CERT are not included in the prioritized problem list.  
Top errors would be the top service/claim types by projected improper payments within 
the MACs jurisdiction and nationally. 
 
The following requirements shall be included for each specific prioritized problem:  
 
  Whether the prioritized problem is a new or a carry-over problem. 
 
  Data source/analysis that led to the identification of the problem.  The IPRS 
shall identify the source of data that led to the identification of the problem for 
inclusion in the IPRS. 
 
  MAC-specific improper payment rate as measured by the CERT program 
and/or the MAC.  This information shall demonstrate how this problem 
contributes to the MAC and national improper payment rates. The MAC shall 
specify whether the improper payment rate was measured by the CERT program 
or the MAC. 
 
  Cause(s) of the problem.  The IPRS shall identify the specific cause of the 
error/vulnerability resulting in improper payments. Such causes may include, but 
are not limited to, insufficient clinical documentation, incorrect coding, 
unnecessary utilization, inadequate provider understanding of relevant CMS rules, 
lack of medical necessity, or the rendering of services in the incorrect clinical 
setting. 
    Baseline measurement to be used for the purpose of assessing improvement.  
The IPRS shall identify the baseline measurement that will be used for the 
purpose of assessing improvement through time.  This section shall also describe 
the process for calculating the starting/baseline problem measurement (e.g., IPR, 
claims denial rate, charges denial rate, provider error rate). An assessment of 
progress towards accomplishment of the improvement goals cannot be made 
unless the starting point/baseline problem measurement is known.  For example, 
an improvement goal to reduce the problem measurement or to improve provider 
compliance with coverage requirements by a specific percentage without the 
baseline or starting problem measurement does not enable measurement of 
progress towards the improvement goal. 
 
  Achievable and measureable improvement goals.  The IPRS shall include 
concrete improvement goals for each prioritized problem that are data-driven, 
achievable, and measurable.  The establishment of improvement goals will require 
the MAC to use information from the MAC MR, data analysis, POE, and other 
departments, as appropriate.  CMS does not mandate the MAC to use any specific 
improvement goal; however, selected improvement goals and MR activities and 
improper payment interventions shall ultimately contribute to lowering the overall 
improper payment rate and/or to an improvement in provider billing behavior.  
The outcome shall be the reduction of the starting/baseline problem measurement 
as listed in the specific improvement goal (e.g. improvement of provider 
billing/provider error rate; number of providers removed from review due to 
decrease in their error rate, reduction of error rate etc.). Specifically, this section 
shall include: 
 
  The timeframe to achieve the improvement goal. 
o
 
  An explanation of progress or lack of progress towards accomplishment of 
o
the improvement goal (when the improvement goal is carried over from the 
previous IPRS or SAR). 
 
  Parameters or thresholds for removing a provider/supplier from MR 
o
activities or other interventions as it relates to the improvement goal. 
 
  Evaluation methods that test the effectiveness and efficiency of MR 
o
activities and other improper payment reduction interventions. 
7.1.2.4.1  Carried-Over Prioritized Problems 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
In addition to the requirements listed above, the MAC shall address the following 
elements for problems that are carried over from previous contract years IPRS or SAR to 
the current contract years IPRS.  These sections shall include problem-specific discrete 
figures and measurements: 
    The effectiveness or ineffectiveness of the MR, POE, and other improper 
payment interventions in reducing the baseline problem measurements.  The 
MAC shall document the progress made towards achieving the goal, or an 
explanation of why the goal was partially met or not met within the specified 
timeframe.  If there is lack of progress towards accomplishment of an 
improvement goal, the MAC shall clearly document the obstacles contributing to 
the lack of progress towards accomplishment of an improvement goal.  The MAC 
shall also offer rationale for either not taking the next steps in progressive 
corrective action or for continuing current interventions.  A continuous lack of 
progress towards goal completion and failure to provide a justification for the lack 
of progress will be considered unacceptable and require revisions to the IPRS. 
 
  Whether modification to the plan is required.  A modified plan, if appropriate, 
shall be developed by the MAC to remedy the obstacles that inhibited progress 
towards accomplishment of the improvement goals. This section shall describe 
how the MAC is revising or modifying the goals and/or the MR, POE, and other 
improper payment interventions, as appropriate. 
 
No previous prioritized problems may be omitted from the current IPRS without an 
explanation.  CMS must be able to track progress on all prioritized problems and their 
goals from a previous IPRS.  When previous prioritized problems improve or meet their 
goals, or when priorities shift to other problem areas, the MAC may inactivate the 
previous prioritized problem or set new improvement goals for that problem. 
 
7.1.2.5 - MR Activities and Improper Payment Interventions Planning 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
For each prioritized problem, the MAC shall develop a comprehensive plan of MR 
activities and other improper payment interventions using the Progressive Corrective 
Action (PCA) process. The MAC shall develop multiple tools to effectively address 
identified problems. The scope and severity of the identified problems shall determine the 
MR activities and improper payment interventions needed to successfully address the 
problems. 
 
The MR activities and improper payment interventions shall be tailored to the nature of 
the problem. Existing interventions that have proven effective in reducing improper 
payments shall be used as one basis for the implementing of MR activities and other 
improper payment interventions. The effectiveness of existing MR activities and other 
improper payment interventions shall be explained in discrete figures and/or improper 
payment rates. 
 
The MAC shall include an estimated date of implementation for each planned MR 
activity and improper payment intervention. 
 
The MR activities and improper payment interventions may include, but are not limited 
to:   
  MR Activities 
  Provider or service-specific probes 
  Targeted medical reviews (TMRs) 
  Notification letters 
  POE priority referrals 
  Automated denials based on local coverage determinations (LCDs) 
  Edit modifications 
  Post-payment and statically valid random sampling (SVRS) 
extrapolation 
  Development or revisions of LCDs 
  Probe review education 
  POE activities 
  Recalcitrant provider process 
 
The MAC shall describe the process for provider selection for MR activities and other 
improper payment interventions. For example, the MAC may describe review criteria in 
the following manner: Providers whose denied claims represent over x percent of the 
dollar amount reviewed will be placed on a prepay review or providers who have a 
provider error rate > x percent will be placed on an x percent prepay review. 
 
If initial MR activities and improper payment interventions are insufficient to improve 
the providers billing behavior, a priority referral to POE for potential intervention may 
be necessary. A POE priority referral indicates to the POE department that this is a 
problem which MR has determined will likely require further educational intervention. 
 
Through communication with POE, it is determined that MR activities, improper 
payment interventions and POE educational efforts have not effectively resolved the 
problem, a referral to the Unified Program Integrity Contractors (UPIC), Recovery 
Auditor or the recalcitrant process may be indicated. 
 
If an improper payment intervention is to refer the provider to another entity, i.e., 
Recovery Auditor, UPIC, or Quality Improvement Organization (QIO), the MAC shall 
have backup MR activities or improper payment interventions if the referral is not 
accepted by the other entity. 
 
The MR department shall employ an effective follow-up process that ensures appropriate 
resolution of the issue. If provider billing aberrances continue, the MAC shall use 
information obtained via consultation with other areas of the MAC which shall include 
the POE department to develop a revised comprehensive plan of MR activities and other 
improper payment interventions using the PCA process. This plan may involve increases 
in MR prepay review or conducting Statistical Sampling for Overpayment Estimation 
(SSOE). As issues are successfully resolved, the MAC shall continue to address other 
program errors/vulnerabilities identified on the prioritized problem list. 
  The MAC MR department shall have a system to track all referrals to POE, medical 
review activities, and improper payment interventions used to address identified 
problems. The MAC MR shall work with POE to develop an effective tracking system 
for referred problems. The Contractor shall track all contacts made by their MR unit with 
providers, UPICs, and Recovery Auditors during the course of medical review. 
 
7.1.2.5.1 - Contractor Suggestions 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
Contractors shall report suggestions on how CMS can help reduce the national improper 
payment rate (e.g., may include national efforts, policy changes, or other broad 
strategies). 
 
7.1.2.6 - Program Management 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
Program management encompasses managerial responsibilities inherent in managing the 
MR program, including: development, modification, and reporting of strategies and 
quality assurance activities; planning, monitoring, and adjusting workload performance; 
budget-related monitoring and reporting; and implementation of CMS MR 
changes/instructions. 
 
7.1.2.6.1 - Budget and Workload Management 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
The IPRS shall include a section that describes the process used to monitor budget and 
workload for the MR activities definitions.  The process shall ensure that spending is 
consistent with the allocated budget and include procedures to revise or amend the plan 
when spending is over or under the budget allocation.  The MAC shall have a table in the 
IPRS identifying the MR workload for the current period of performance. 
 
The MAC shall assess the cost effectiveness of each MR activity and appropriateness of 
each MR activity.  The MAC shall determine if the resources required for the planned 
MR activity can contribute to achieving the reduction of the improper payment error rate.  
In addition, the IPRS shall describe how workload for each MR activity is accurately and 
consistently reported. The workload reporting process shall also assure the proper 
allocation of employee hours required for each MR activity. 
 
7.1.2.6.1.1  Workload Reporting Tables 
(Rev. 721; Issued: 06-09-17; Effective: 07-11-17; Implementation: 07-11-17) 
 
The following tables shall be included in the IPRS: 
 
Medical Review Program Workload A/B MAC and HHH MAC             
    Part A  Part B  Home Health  Hospice 
Statement    Projected  Projected  Projected  Projected 
of Work  MR Activity  Workload  Workload  Workload  Workload 
(SOW)    for this  for this  for this  for this 
  Period of  Period of  Period of  Period of 
  Performance  Performance  Performance  Performance 
C.5.12.1.6  Defending MR         
Decisions at ALJ 
Hearings  
C.5.12.2.1  Automated         
Medical Review 
C.5.12.2.2  Non-Medical         
Record Review 
C.5.12.2.3  Demand Bill         
Claims Review 
C.5.12.2.4  Medical Record         
Review 
Reopening 
C.5.12.2.5  Prepay Provider         
Specific Medical 
Record Review 
C.5.12.2.6   Prepay Service         
Specific Medical 
Record Review 
C.5.12.2.7   Prepay Probe         
Provider Specific 
Medical Record 
Review 
C.5.12.2.8  Prepay Probe         
Service Specific 
Medical Record 
Review 
C.5.12.2.10   Postpay Probe         
Provider Specific 
Medical Record 
Review 
C.5.12.2.11  Postpay Probe         
Service Specific 
Medical Record 
Review 
C.5.12.2.12   Postpay Provider         
Specific Medical 
Record Review             
    Part A  Part B  Home Health  Hospice 
Statement    Projected  Projected  Projected  Projected 
of Work  MR Activity  Workload  Workload  Workload  Workload 
(SOW)    for this  for this  for this  for this 
  Period of  Period of  Period of  Period of 
  Performance  Performance  Performance  Performance 
C.5.12.2.13  Postpay Service          
Specific Medical 
Record Review 
C.5.12.2.17  Externally         
Directed 
Reviews 
C.5.12.2.18  Provider         
compliance 
Group Directed 
Reviews 
C.5.12.2.20  One on One         
Education 
 
Medical Review Program Workload DME MAC 
    Projected workload 
SOW  MR Activity  for this Period of 
Performance 
4.7.1  Automated Medical Review   
4.7.2  Non-Medical Record Review   
4.7.3  Demand Bill Claims Review   
4.7.4  Medical Record Review Reopening   
4.7.5   Prepay Provider Specific Medical Record Review   
4.7.6  Prepay Service Specific Medical Record Review   
4.7.7   Prepay Probe Provider Specific Medical Record    
Review 
4.7.8  Prepay Probe Service Specific Medical Record   
Review 
4.7.10   Postpay Probe Provider Specific Medical Record   
Review 
4.7.11  Postpay Probe Service Specific Medical Record   
Review 
4.7.12   Postpay Provider Specific Medical Record Review   
4.7.13  Postpay Service Specific Medical Record Review   
4.7.17  Externally Directed Reviews   
4.7.18  Provider Compliance Group Directed Reviews   
4.7.22  One on One Education   
4.12   Defending MR decisions at ALJ Hearings   
  7.1.2.6.2 - Staffing and Workload Management 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
The MACs shall list the number, job titles, and qualifications/credentials of all full-time-
equivalent (FTE) employees.  If resources allow, an MR Nurse may be shared with 
another functional area, such as claims processing, so long as only the percentage of the 
nurses time spent on MR activities is identified in the strategy and accounted for in the 
appropriate functional area.  For example, if MR agrees to share 0.5 of an FTE with 
claims processing to assist with the pricing of Not Otherwise Coded claims, this 0.5 FTE 
shall be accounted for in claims processing and not in MR. 
 
7.1.2.7 - Quality Assurance (QA) Plan 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
In each element of the IPRS, the MAC shall incorporate quality assurance (QA) 
activities.  The QA activities ensure that each element is performed consistently and 
accurately throughout the MACs MR program.  The MAC shall have in place 
continuous quality improvement procedures. Quality improvement procedures use 
information yielded from quality assurance methods and allow the MAC to analyze the 
outcomes from their program and to continually improve the effectiveness of their 
processes. 
 
The QA process shall include effective consultations between MR, POE, and other 
components, as appropriate, to ensure that duplicate efforts are not being undertaken. The 
QA process shall inform the MAC if claims subject to MR activity are consistently 
overturned on appeal.  An effective QA process shall include regular meetings with other 
operational areas, including data analysis, policy development, POE, and appeals. 
 
Because the MAC is tasked with evaluating their MR program activities, it is necessary 
to establish QA activities that include thresholds and time limits for the MAC to assess 
their MR operations that ultimately improve the IPR.  Examples include, but are not 
limited to: 
 
  Data analysis 
  Educational interventions 
  Inter-Rater Reliability (IRR) for MR licensed health care professionals and 
certified coders participating in medical review 
  Define acceptable IRR rates and actions taken for not meeting those 
o
acceptable rates  
  Accuracy of medical review decisions 
  Define acceptable accuracy rates and actions taken for not meeting those 
o
acceptable rates  
  Overturn rate on appeals 
  Cost of review 
  Edit effectiveness 
  7.1.2.7.1 - QA for Data Analysis and Information Gathering 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
The MAC shall develop a QA process for data analysis and information gathering that 
frequently reviews the data and how the information is used. 
 
The MAC shall: 
 
  Establish an internal process for routinely reviewing data results 
  Document the job titles, qualifications and contract operational areas represented 
by those who routinely review the data results 
  Describe the log tracking system(s) utilized for data analysis and how this 
information was developed by the MAC 
  Describe how decisions are made as a result of the data analysis meetings. 
 
7.1.2.7.2 - QA for Development of the Prioritized Problem List 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
The MAC shall list the data and the metrics used to determine and verify each identified 
prioritized problem.  That is, each identified prioritized problem shall have an 
explanation of current data and other information used to support the decisions to include 
the problem and assign its priority.  The QA process shall ensure that MR activities and 
improper payment interventions are not dedicated to problems that are consistently 
overturned on appeal, based on outdated data analysis, or the focus of other operational 
areas of the MAC with similar goals. 
 
The QA shall be performed for each intervention that checks for effectiveness and 
progress towards the specified goal.  The QA component shall include a projected goal, a 
timeline to achieve the goal, and an element to assess effectiveness of the intervention 
and progress towards the stated goal.  The QA component shall include a determination 
of whether the problem has been resolved or partially met, or whether a more progressive 
course of action is required.  The MAC shall evaluate the effectiveness of edits and the 
priority status of the problem.  An effective QA process shall also include periodic 
meetings with other operational areas, such as POE. 
 
7.1.2.7.3 - QA for Program Management 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
The MAC shall describe the processes employed to assure accuracy and consistency in 
the reporting of spending, workload, and staffing levels.  The MAC shall address how to 
maintain accuracy in medical review decision-making and IRR assessments and shall 
report the results of the IRR for the MR licensed health care professionals and certified 
coders participating in the medical review process.  Each IPRS, SAR shall contain the 
IRR scores for the period of performance covered by that reporting period. 
 
7.1.3 - IPRS Submission  (Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
The MAC shall submit an IPRS as directed by the SOW and Contracting Officers 
Representative (COR).  The current IPRS shall be updated or revised as required by the 
COR after review by the Business Function Leads (BFLs) (MR, CERT and POE) and the 
Regional Office (RO) Technical Monitor (TM) MR staff. 
 
7.1.4 - IPRS Revision 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
The MAC shall notify their COR, RO TM and the MR BFL when their IPRS requires a 
revision/update of the final approved IPRS.  Any revisions/updates shall be described in 
the medical review section of the current monthly status report.  The IPRS revision shall 
be included in the next strategy deliverable (either the IPRS or SAR). 
 
7.2 - Medical Review Activity Definitions 
(Rev. 444, Issued: 12-14-12, Effective: 04- 01- 13 (FISS and MCS); 07-01-13 (VMS); 
Implementation: April 1, 2013 (Implementation of FISS and MCS); July 1, 2013 
(Implementation of VMS) 
 
7.2.1 - Background 
(Rev. 444, Issued: 12-14-12, Effective: 04- 01- 13 (FISS and MCS); 07-01-13 (VMS); 
Implementation: April 1, 2013 (Implementation of FISS and MCS); July 1, 2013 
(Implementation of VMS) 
 
This section provides requirements and instructions for Part A, Part B, and Durable 
Medical Equipment (DME) MACs, fiscal intermediaries (FIs), and carriers. 
 
The reporting requirements for Medical Review (MR) activities performed by the 
Contractor were formerly captured in the Program Integrity Management Reporting 
(PIMR) system. Effective 7/1/2012, the PIMR system was retired, requiring the revision 
to this chapter of the Program Integrity Manual. 
 
The new process for the oversight of Medical Review activities administered by the 
Contractor will improve the management of medical review cost, savings, and workload. 
The manual Medical Review Savings reporting process will replace the Program Integrity 
Manual Review system. 
 
The Medical Review, savings, and workload data shall be collected through the use of a 
manual report until such a time that it is decided that an automated reporting system is 
required and developed to meet the business needs of The CMS Office of Financial 
Management, Provider Compliance Group, Division of Medical Review and Education.  
The CMS will obtain Medical Review Savings data through manual reporting by 
Contractor staff.  Those reports will be due monthly, on the20th day of the month. 
 
7.2.2  Definitions  (Rev. 721; Issued: 06-09-17; Effective: 07-11-17; Implementation: 07-11-17) 
 
The reporting process will require data that can be classified under three different 
categories of activity measures:  Workload, Cost, and Savings.  The Medical Review 
definitions shall apply to all Medical Review activities and shall not be deviated from or 
interpreted differently than stated below.  The consistency in the application of these 
definitions will provide validity to the data reported that is required to assess the 
effectiveness of the CMS Medical Review and Education Program being administered by 
the Contractor(s) 
 
MEDICAL REVIEW  
 
The review of claims and associated medical documentation that occurs when review 
staff:  
 
1.  Make a coverage decision (benefit category, statutory exclusion, or reasonable 
and necessary) and a coding decision to determine the appropriate payment for 
claims, or 
 
2.  Investigate complaints to determine whether a corrective action was effective 
(e.g., an MR activity such as provider notification letter), or identify situations 
that require prepayment edits or the development of a local coverage 
determination (LCD). 
 
The medical review process requires the application of clinical judgment either as part of 
a review, in writing policies, or in the development of guidelines and processing 
instructions.  For local medical review edits, input must be from the Contractor Medical 
Review clinicians/staff.  For national edits, input from the Contractor medical/clinical 
staff is not necessary. The medical review can be performed either before or after the 
claim has been paid. Generally, a line cannot result in medical review workload or 
savings if it is not referred to medical review.  A line that potentially involves both 
medical review and claims processing work should suspend to a claims processing 
reviewer, and that reviewer should refer the line to medical review only if the claims 
processing reviewer cannot make a decision based on guidelines available to that 
reviewer. 
 
Do NOT consider the review as medical review if it requires: 
 
1.  Pricing Only, or 
2.  Coding Only, or 
3.  Pricing and Coding only. 
 
Consider the review as medical review if: 
 
1.   Pricing is based on medical record review determination. or 
2.    Coding is based on medical record review determination, or  3.    Coding and Pricing are based on medical record review determination. 
 
If an automated claims processing edit has already made a decision to pay, and the claim 
only suspends for pricing, consider the review automated claims processing and do not 
count it for medical review workload or costs. 
 
7.2.2.1 - Automated Medical Review 
(Rev. 721; Issued: 06-09-17; Effective: 07-11-17; Implementation: 07-11-17) 
 
A medical review is considered automated when a payment decision is made at the 
system level, using available electronic information, with no manual intervention.  It 
must be based on guidelines for which the contractors Medical Review area has 
developed some or all of the logic for review of specific billing and coverage criteria 
based on vulnerabilities identified by the Contractors Medical Review area.  This 
process is done completely through the Medical Review Contractors' technology 
developed in response to medical review data analysis. 
 
7.2.2.2 - Non-Medical Record Review 
(Rev. 721; Issued: 06-09-17; Effective: 07-11-17; Implementation: 07-11-17) 
 
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. 
 
7.2.2.3 - Demand Bill Claims Review 
(Rev. 444, Issued: 12-14-12, Effective: 04- 01- 13 (FISS and MCS); 07-01-13 (VMS); 
Implementation: April 1, 2013 (Implementation of FISS and MCS); July 1, 2013 
(Implementation of VMS) 
 
Demand bills are submitted at the beneficiarys/representatives request because the 
beneficiary disputes the providers opinion that the bill will not be paid by Medicare and 
requests the bill be submitted for a payment determination.  The demand bill is identified 
by the presence of a condition code 20.  There must be a written request from the 
beneficiary to submit the bill, unless the beneficiary is deceased or incapable of signing.  
In this case, the beneficiarys guardian, relative or other authorized representative may 
make the request. This includes SNF and HHA demand bills as well as other demand 
bills (outpatient) and Third Party Liability Medical Reviews. 
 
7.2.2.4 - Medical Review Reopening 
(Rev. 444, Issued: 12-14-12, Effective: 04- 01- 13 (FISS and MCS); 07-01-13 (VMS); 
Implementation: April 1, 2013 (Implementation of FISS and MCS); July 1, 2013 
(Implementation of VMS) 
  A MR reopening is a remedial action taken to review and change a final determination or 
decision that resulted in either an overpayment or an underpayment, even though the 
determination for decision was correct based on the evidence in the record.  It is separate 
and distinct from the appeals process.  The Contractor may choose to reopen a claim for 
late documentation.  The MR department shall conduct a reopening of claims sent by the 
appeals department which meet the criteria in IOM Pub. 100-04, Section 10.3.  (1) A 
provider failed to timely submit documentation through an Additional Documentation 
Request (ADR) (2) Claim was denied because the requested documentation was not 
received timely (3) the requested documentation is received after the 45 day period with 
or without a request for redetermination or reopening AND (4)  The request is filed 
within 120 days of the receipt of the initial determination. Do not count more than one 
reopening per claim. 
 
7.2.2.5 - Prepay Provider Specific Medical Record Review  
(Rev. 721; Issued: 06-09-17; Effective: 07-11-17; Implementation: 07-11-17) 
 
Medical record review requires a licensed medical professional to use clinical review 
judgment to evaluate medical records.  This includes requests for, collection and 
evaluation of medical records or any other documentation.  The review is as a result of 
vulnerabilities determined by data analysis and identified in the Medical Review strategy.  
If the requested documentation is not received, the review is not considered medical 
record review.  The failure of the provider to submit documentation shall result in a 
denial.  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 the purpose of 
calculating and reporting MR workload, cost and savings, contractors shall count these 
denials as automated reviews or non-medical record reviews depending on the method of 
development. 
 
7.2.2.6 - Prepay Service Specific Medical Record Review 
(Rev. 721; Issued: 06-09-17; Effective: 07-11-17; Implementation: 07-11-17) 
 
Medical record review requires a licensed medical professional to use clinical review 
judgment to evaluate medical records.  Service specific prepay medical review of claims 
requires that a medical review determination be made before claim payment directed at a 
certain service.  It includes requests for, collection and evaluation of medical records or 
any other documentation.  The review is as a result of vulnerabilities determined by data 
analysis and identified in the Medical Review strategy.  The failure of the provider to 
submit documentation shall result in a denial.  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 the purpose of calculating and reporting MR workload, cost and savings, 
contractors shall count these denials as automated review or non-medical record review 
depending on whether the denial is automated or requires manual intervention.   
7.2.2.7 - Prepay Provider Specific Probe Medical Record Review  
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
Medical record review requires a licensed medical professional to use clinical review 
judgment to evaluate medical records. Prepay probe medical record reviews are done to 
verify that the program vulnerability identified through data analysis actually exists and 
will require education and possible targeted medical record review. In the case of a 
possible provider specific problem, contractors should generally use a sample of 20 -40 
claims submitted by that individual provider. 
 
The Contractor shall validate data analysis findings by conducting probe reviews and 
implementing the necessary PCAs in accordance with IOM Pub.100-08 Chapter 3. Once 
a problem has been verified, the Contractor shall implement the necessary PCA. This 
includes providing the initial notification informing the provider of the results of the 
probe review, and collaborating with Provider Outreach and Education (POE) to share 
potential educational needs, and making referrals to POE, UPICs, RACs, or others as 
appropriate. 
 
7.2.2.8 - Prepay Service Specific Probe Medical Record Review  
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
Medical record review requires a licensed medical professional to use clinical review 
judgment to evaluate medical records. Prepay service specific probe medical record 
reviews are done to verify that the program vulnerability identified through data analysis 
actually exists and will require education and possible targeted medical review. For 
Prepay review in the case of a possible systemic problem, the contractor shall include a 
random or stratified sample of generally 100 claims submitted from across all providers 
or suppliers that bill the particular item or service in question. 
 
The Contractor shall validate data analysis findings by conducting probe reviews and 
implementing the necessary PCAs in accordance with IOM Pub.100-08 Chapter 3. Once 
a problem has been verified, the Contractor shall implement the necessary PCA. This 
includes providing the initial notification of the results of the probe review, and 
collaborating with Provider Outreach and Education (POE) to share potential educational 
needs, and making referrals to POE, UPICs, RACs or others as appropriate. 
 
7.2.2.9 - Advance Determination Medicare Coverage (ADMC) 
(Rev. 444, Issued: 12-14-12, Effective: 04- 01- 13 (FISS and MCS); 07-01-13 (VMS); 
Implementation: April 1, 2013 (Implementation of FISS and MCS); July 1, 2013 
(Implementation of VMS) 
 
At the request of a supplier or beneficiary, the DME MAC may determine in advance of 
delivery of an item whether payment for that item is medically necessary.  The request 
must contain adequate information from the patients medical record to identify the  patient for whom the item is intended, the intended use of the item, and the medical 
condition of the patient that necessitates the use of the item. 
 
7.2.2.10 - Postpay Provider Specific Probe Medical Record Review  
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
Medical record review requires a licensed medical professional to use clinical review 
judgment to evaluate medical records. Postpay provider specific probe medical record 
reviews are done to verify that the program vulnerabilities identified through data 
analysis actually exist and will require education and/or further medical review. For 
postpay review of an individual provider in the case of a possible provider specific 
problem, contractors shall include in the probe sample a random or stratified sample of 
generally 20 -40 claims from that provider with dates of service from the period under 
review. 
 
The Contractor shall validate data analysis findings by conducting probe reviews and 
implementing the necessary PCAs in accordance with, IOM Pub. 100-08 Chapter 3. Once 
a problem has been verified, the Contractor shall implement the necessary PCA. This 
includes providing the initial notification informing the provider of the results of the 
probe review, and collaborating with Provider Outreach and Education (POE) to share 
potential educational needs, and making referrals to POE, UPICs, RACs or others as 
appropriate. 
 
7.2.2.11 - Postpay Service Specific Probe Medical Record Review  
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
Medical record review requires a licensed medical professional to use clinical review 
judgment to evaluate medical records. Postpay service specific probe medical record 
reviews are done to verify that the program vulnerabilities identified through data 
analysis actually exist and will require education and/or further medical review. For 
Postpay review in the case of a possible service/systemic problem, the contractor should 
generally include a random or stratified sample of 100 claims with dates of service from 
the period under review from across all providers or suppliers that bill the particular item 
or service in question. 
 
The Contractor shall validate data analysis findings by conducting probe reviews and 
implementing the necessary PCAs in accordance with, IOM Pub. 100-08 Chapter 3. Once 
a problem has been verified, the Contractor shall implement the necessary PCA. This 
includes providing the initial notification of the results of the probe review, and 
collaborating with Provider Outreach and Education (POE) to share potential educational 
needs, and making referrals to POE, UPICs, RACs or others as appropriate. 
 
7.2.2.12 - Postpay Provider Specific Medical Record Review  
(Rev. 721, Issued: 06-09-17; Effective: 07-11-17; Implementation: 07-11-17) 
  Medical record review requires a licensed medical professional to use clinical review 
judgment to evaluate medical records.  Provider specific postpay medical record review 
of claims requires that a benefit category review, statutory exclusion review, and/or 
reasonable and necessary review be made after claim payment directed at an individual 
provider.  This includes requests for, collection and evaluation of medical records or any 
other documentation.  The review is as a result of vulnerabilities determined by data 
analysis and identified in the Medical Review strategy.  The failure of the provider to 
submit documentation shall result in a denial.  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 the purpose of calculating and reporting MR workload, cost and 
savings, this is postpay medical record review and is not to be counted as a probe review. 
 
7.2.2.13 - Postpay Service Specific Medical Record Review  
(Rev. 721; Issued: 06-09-17; Effective: 07-11-17; Implementation: 07-11-17) 
 
Medical record review requires a licensed medical professional to use clinical review 
judgment to evaluate medical records.  Service specific postpay medical record review of 
claims requires that a benefit category review, statutory exclusion review, and/or 
reasonable and necessary review be made after claim payment directed at a certain 
service.  This includes requests for, collection and evaluation of medical records or any 
other documentation.  The review is as a result of vulnerabilities determined by data 
analysis and identified in the Medical Review strategy.  If the requested documentation is 
not received, it is not considered a medical record review.  The failure of the provider to 
submit documentation shall result in a denial.  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 the purpose of calculating and reporting MR workload, cost and 
savings, this is postpay medical record review and is not to be counted as a probe review. 
 
7.2.2.14 - Data Analysis 
(Rev. 444, Issued: 12-14-12, Effective: 04- 01- 13 (FISS and MCS); 07-01-13 (VMS); 
Implementation: April 1, 2013 (Implementation of FISS and MCS); July 1, 2013 
(Implementation of VMS) 
 
Used to identify and verify potential errors to produce the greatest protection for the 
Medicare program.  Data analysis is an essential first step in determining whether 
patterns of claims submission and payment indicate potential problems.  It includes 
simple identification of aberrancies in billing patterns within a homogeneous group, or 
much more sophisticated detection of patterns within claims or groups of claims that 
might suggest improper billing or payment.  Data analysis is undertaken as a part of 
general surveillance and review of submitted claims, conducted in response to 
information about specific problems stemming from complaints, provider or beneficiary  input, fraud alerts, reports from CMS, other ACs, MACs, or independent government and 
nongovernmental agencies. 
 
Background  The Contractor uses CERT findings, internal and external data sources, 
review of claims, and information from other operational areas to 
identify patterns of erroneous billing submissions and areas of over 
utilization to target provider-specific review. 
 
7.2.2.15 - Medical Review Edit Development 
(Rev. 642, Issued: 02-22-16, Effective: 02-16-16, Implementation: 02-16-16) 
 
Medical Review edit development includes all activities necessary to create and set up a 
computerized logic test developed with the assistance of health professionals that 
compares the data elements on a Medicare claim for the purposes of: (1) making a local 
coverage or coding determination; or (2) suspending a claim so such determinations can 
be made by appropriate Medical Review personnel prior to or after payment of the claim. 
 
7.2.2.16 - Externally Directed Reviews 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
Medical reviews directed by or directly supporting the OIG, law enforcement, UPICs, or 
court orders, when funded by CMS. 
 
7.2.2.17 - Provider Compliance Group Directed Reviews 
(Rev. 642, Issued: 02-22-16, Effective: 02-16-16, Implementation: 02-16-16) 
 
Includes only those Medical reviews and special studies directed by or directly 
supporting action requested by the Provider Compliance Group (PCG).  Contractors shall 
only count workload under this category as directed or requested by PCG and their 
COTR. 
 
7.2.2.18 - One on One Education 
(Rev. 835; Issued: 10-12-18; Effective: 11-13-18; Implementation: 11-13-18)  
 
This applies to MAC and SMRC.  
 
One-on-one education places emphasis on reducing the paid claims error rate by 
notifying, either in writing or orally, the individual billing entities (i.e., providers, 
suppliers, or ordering clinician) of review findings identified on specific claims or a 
group of claims reviewed on probe or targeted medical review by the MAC, RAC, or 
SMRC, or based on billing patterns identified by data analysis (e.g., CBRs, OIG reports, 
PEPPER/FATHOM reports, RAC findings, CERT improper payment findings).  
 One-on-one education does not include:  
  Educational articles impacting nationwide issues  
  Responses to inquiries on claims that were not medically reviewed     General training sessions  
  POE education activities 
  Speaking at society meetings  
  Writing articles in society newsletters regarding new or significantly revised 
LCDs. 
 
Note: For the purpose of Targeted Probe and Educate (TPE) and TPE specific reporting, 
letters shall not be considered or reported as one on one education. Please see PIM 
chapter 3, section 3.2.5 for details regarding the definition of TPE one-on-one education. 
 
7.2.3 - Coding Decisions 
(Rev. 444, Issued: 12-14-12, Effective: 04- 01- 13 (FISS and MCS); 07-01-13 (VMS); 
Implementation: April 1, 2013 (Implementation of FISS and MCS); July 1, 2013 
(Implementation of VMS) 
 
Where used in this Chapter, the term coding decisions" generally refers to MR 
decisions.  For example, coding decisions include each of the following: 
 
  Contractor reviews product information for a durable medical equipment 
prosthetics, orthotics, and supplies (DMEPOS) item, finds that the wrong code 
has been billed based upon the review of diagnoses codes and narrative 
information included on the claim/bill, changes the code to the correct code, and 
completes the claim. 
 
In the situation described above, the Contractor denies the claim line with the 
wrong code and uses the message that the supplier has incorrectly coded the item. 
 
  The Contractor determines that a service billed as a bilateral x-ray is a single view 
x-ray and indicates a down code to a single view x-ray in the remittance advice. 
 
Include only coding decisions that require the application of clinical judgment as 
part of a review, in writing policies, or in the development of guidelines and 
processing instructions. 
 
7.2.4 - Monthly Reporting of Medical Review Savings 
(Rev. 721; Issued: 06-09-17; Effective: 07-11-17; Implementation: 07-11-17) 
 
The Contractor shall utilize the definitions in their statement of work (SOW) to report 
those savings resulting from medical review. The report shall be submitted by the 20th 
day of each calendar month and submitted as a deliverable via the CMS ART portal.  The 
activities and metrics to be reported for calculating Medical Review Savings are detailed 
in the spreadsheet below. The template, developed by the Provider Compliance Group, 
includes the formulas required to calculate MR savings and shall not be altered or 
deviated from. 
  Medical Review Savings Report Template Sample next page. 
 
 
(Medical Record Review (MRR)) 
 
7.3 - The Strategy Analysis Report (SAR) 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
7.3.1 - General Overview 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
The purpose of the SAR is to assess progress towards achieving the improvement goals 
set out by the IPRS.  The SAR shall analyze the specific results of the MACs current 
IPRS by using a systematic, data-guided evaluation of all aspects of the IPRS:   
  the listed prioritized problems 
  current changes to the baseline problem measurements specific to each prioritized 
problem 
  progress or lack of progress towards accomplishment of the improvement goals 
specific to each prioritized problem 
  effectiveness of the specific MR activities 
  improper payment interventions  
  improvement of provider billing behavior   
 
The SAR encapsulates the previous IPRS and uses that information to reassess, modify or 
to continue with the current planned approach to demonstrate progress towards their 
stated improvement goals for the current period of performance.   
 
7.3.2 - SAR Required Format 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
7.3.2.1 - Cover Page 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
The cover page shall include the following information: 
  MAC name and address 
  MAC contract number 
  States in jurisdiction 
  Period of performance (explanation shall be included if the SAR is reporting on a  
period of performance less than 6 months) 
  Report coordinator contact information (name, telephone number and e-mail 
address) 
  SAR due date and submission date  
 
7.3.2.2 - Overview/Executive Summary 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
The executive summary of the SAR shall provide a brief, high-level summation of overall 
MR program requirements enacted and any progress, changes, or updates since the 
submission of the IPRS.  This section shall address important projects and CMS 
requirements that are not captured under the Prioritized Problem List and addressed in the 
IPRS. 
 
The MAC shall not cut and paste the Overview/Executive Summary from the previous 
IPRS into the SAR.  If there are no changes from information submitted in the previous 
IPRS, the MAC shall state no changes from IPRS submitted on x date. 
 
7.3.2.3 - Prioritized Problem List 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15)   
The SAR requires the MAC to assess their prioritized IPRS problem list and report on 
that assessment to date. The SAR shall summarize the MR activities, improper payment 
interventions, and MR activities taken to address each of the identified prioritized 
problems in the MACs IPRS. 
 
This section shall include details on both prioritized problems that were contained in the 
IPRS, in addition to newly identified problems.  Units or measurements used to quantify 
baseline problem measurements, improvement goals, and the achievement or non-
achievement of the improvement goals shall be consistent throughout the SAR and IPRS. 
 
For each specific prioritized problem on the IPRS problem list, the MAC shall provide 
the following information:  
 
A.  Prioritized problem description. 
 
Each prioritized problem on the problem list shall include a problem description. This 
section shall contain a brief description of problem characteristics and associated planned 
MR activities and improper payment interventions. The MAC shall include information 
regarding how the problem was identified (i.e., CERT, Recovery Auditor, CMS, OIG, 
Comparative Billing Report (CBR), MAC internal data analysis, GAO, etc.) 
 
Duplication of the details contained in the IPRS is not needed; rather, the MAC may refer 
the reader to the previous IPRS for detailed descriptions, as required.  The reader should 
easily see that the problems already identified and defined in the IPRS correspond to the 
SARs listing of numbered problems. 
 
The MAC shall also provide the problem identification number or case number (if used) 
that is not the ranking number of the prioritized problem.  This number shall be consistent 
in the IPRS and the SAR. 
 
B.  Whether the prioritized problem is a new or carry-over problem from the IPRS. 
 
The MAC shall report on both the problems that were identified in the IPRS as well as 
problems that have been added to the IPRS prioritized list as a result of data analysis.  
Any prioritized problem removed since the last IPRS shall be explained. 
 
For problems that have been newly identified and added to the SAR subsequent to the 
IPRS submission, a detailed narrative is appropriate. 
 
7.3.2.4 - MR Activities and Improper Payment Interventions Planning 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
The MAC shall provide updates on MR activities and other improper payment 
interventions planned and/or continued in order to improve the problem and meet  improvement goals.  The MAC shall provide updates on the information described in the 
IPRS.   Such information includes, but is not limited to: 
 
  Baseline problem measurement reported in IPRS compared to problem 
measurement after intervention implementation (may be provider-specific and/or 
service-specific).  The baseline problem measurement from the IPRS and current 
problem measurement in the SAR shall be the same type of error measurement that 
was stated in the IPRS. 
 
  Differences in the number of providers and/or services undergoing MR activities 
and other intervention as reported in the IPRS as what has been observed at the 
time the SAR is finalized. 
 
  Improvement goal revisions, as appropriate.  Effectiveness of the MR activities 
and improper payment interventions in meeting the goal shall be addressed.  These 
updates shall be stated in measureable terms that are data driven. 
 
  Any identified obstacles regarding the MR activities or improper payment 
interventions to achieve the improvement goal and suggestions for improvement. 
 
  For each prioritized problem, the contractor shall report on probe reviews 
conducted, as appropriate.  Detailed information shall include: 
 
  Number of probe reviews identified: 
o
The number of probe reviews the MAC planned for a specific 
problem and the type of data and/or analysis used to determine the 
number of probes. 
 
  Number of  probe reviews initiated:  
o
A subset of the number identified. This number conveys the actual 
number of probe reviews effectuated to date. Generally, the probe 
initiation date is the date a request for medical records is sent to the 
provider(s). The date of the probe start shall be included. 
 
  Type of probe review (i.e., pre-pay vs. post-pay, provider-specific vs. 
o
service specific) 
 
  Number of probe reviews completed: 
o
This number conveys the number of probe reviews concluded. It is 
the number of probe review cases for which corrective action has 
been initiated. 
 
  Probe Results:  current problem measurement determined by the probe, 
o
progress towards goal, effectiveness of probe edit. 
    For each prioritized problem , the contractor shall report on targeted reviews 
conducted, as appropriate: Detailed information shall include: 
 
  Number of targeted reviews identified: 
o
The number of targeted reviews as well as the subject of targeted 
reviews (benefit, provider type, and provider specific) that the 
MAC planned for a specific problem, and the type of data and/or 
analysis used to determine the number. 
 
In the case of more than one service within a benefit or provider 
type, the benefit or provider type should be grouped under a 
general heading in the problem description. However, when 
reporting the number of identified target reviews planned, the SAR 
should clearly report the number planned for each code, or range of 
codes representing the specific service or provider type (Diagnosis 
Related Group (DRG), Healthcare Common Procedure Coding 
System (HCPCS), ICD-10) within the benefit or service 
description. An example is, Physical Medicine & Rehabilitation:  
the total number identified for targeted reviews is x number.  For 
physical medicine & rehabilitation CPT code XXX-traction, 
mechanical, x number of targeted reviews are planned. For 
physical medicine & rehabilitation code range XXX1-XXX3, 
therapeutic procedures, x number of targeted reviews are identified 
(for a total of x number of identified target reviews). Start date of 
the targeted review and baseline problem measurement shall be 
included. 
 
Similarly, if targeted reviews are planned for specific providers, 
the total number of providers, the states in which they practice and 
the service, procedure or diagnosis codes subject to the specific 
provider targeted claims shall be included in the SAR.  An 
example is, ESRD, dialysis centers: x number of centers have 
been identified for targeted reviews. The focus for each dialysis 
center on targeted review will be XXX CPT Code, extra 
hemodialysis session. For each center identified, x number of 
targeted reviews are planned.   The start date and the baseline 
problem measurement shall be included. 
 
  Number of targeted reviews initiated: 
o
This number is a subset of the number described above, Number 
Identified. It is the actual number of providers or services 
activated for targeted review. As described earlier, the SAR shall 
clearly identify the focus of the targeted review: the procedure, 
diagnosis or DRG code, or place of service, etc.  The percentage of 
claims to be stopped by an edit for each targeted review shall be 
included.   
  Type of targeted review (i.e., random v. 100 percent, pre-pay v. post-pay,  
o
provider-specific v. service-specific) 
 
  Number completed: 
o
This number conveys the number of targeted reviews concluded. It is the 
number of targeted review cases for which corrective action has been 
initiated. 
 
  Targeted Review Results: current problem measurement, progress towards 
o
goal, effectiveness of edit. 
 
  Other MR activities and improper payment interventions taken to address the 
specific prioritized problem and the effectiveness of the interventions.  
 
If analysis of the MR activities and other improper payment interventions shows that the 
improvement goals have been achieved for a specific prioritized problem, the MAC shall 
determine if the improved provider billing behavior or decrease in IPR is sustainable. If 
so, the MAC shall consider closing that problem and/or reprioritizing their problem list. 
 
The MAC shall include a description of the analysis used to make the determination that 
the improvement goal was met and rationale to support the closing and/or reprioritizing 
of the problem. 
 
Conversely, if the results of the SAR convey ineffectiveness of the MR activities and 
improper payment interventions, the SAR shall include modified plans for the areas of 
ineffectiveness of the IPRS.   The result of this analysis shall lead the MAC to design 
future MR activities and improper payment interventions aimed at achieving the revised 
or same improvement goals. 
 
7.3.2.5 - Program Management 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
7.3.2.5.1 - Budget and Workload Management 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
The SAR shall include a narrative that describes any significant fluctuations in the MR 
workloads and MR budget since the previous IPRS.  The MAC shall include a table 
identifying any modification made to MR workload since the previous IPRS.   
7.3.2.5.1.1 - Workload Reporting Tables 
(Rev. 721; Issued: 06-09-17; Effective: 07-11-17; Implementation: 07-11-17) 
 
SAR/Medical Review Program Workload A/B MAC and HHH MAC 
 
SOW  MR  Part A  Part B  Home Health  Hospice  Modifications/
  Activity  Projected  Projected  Projected  Projected  Changes since 
  Workload  Workload  Workload for  Workload  the previous 
for this  for this  this Period of  for this  IPRS 
Period of  Period of  Performance   Period of   
Performance   Performance   Performance 
 C.5.12.1.6  Defending           
MR 
Decisions 
at ALJ 
Hearings  
C.5.12.2.1  Automate          
d Medical 
Review 
C.5.12.2.2  Non-          
Medical 
Record 
Review 
C.5.12.2.3  Demand           
Bill 
Claims 
Review 
C.5.12.2.4  Medical           
Review 
Reopening 
C.5.12.2.5   Prepay           
Provider 
Specific 
Medical 
Record 
Review 
C.5.12.2.6  Prepay           
Service 
Specific 
Medical 
Record 
Review 
C.5.12.2.7  Prepay            
Probe 
Provider  SOW  MR  Part A  Part B  Home Health  Hospice  Modifications/
  Activity  Projected  Projected  Projected  Projected  Changes since 
  Workload  Workload  Workload for  Workload  the previous 
for this  for this  this Period of  for this  IPRS 
Period of  Period of  Performance   Period of   
Performance   Performance   Performance 
Specific 
Medical 
Record  
Review 
C.5.12.2.8  Prepay           
Probe 
Service  
Specific 
Medical 
Record 
Review 
C5.12.2.10  Postpay           
Probe 
Provider 
Specific 
Medical 
Record 
Review 
C.5.12.2.11  Postpay           
Probe 
Service 
Specific 
Medical 
Record 
Review 
C.5.12.2.12   Postpay            
Provider 
Specific 
Medical 
Record  
Review 
  Postpay            
C.5.12.2.13  Service 
Specific 
Medical  
Record 
Review 
C.5.12.2.17  Externally           
Directed 
Reviews  SOW  MR  Part A  Part B  Home Health  Hospice  Modifications/
  Activity  Projected  Projected  Projected  Projected  Changes since 
  Workload  Workload  Workload for  Workload  the previous 
for this  for this  this Period of  for this  IPRS 
Period of  Period of  Performance   Period of   
Performance   Performance   Performance 
C.5.12.2.18  Provider           
Complian
ce Group 
Directed 
Reviews 
C.5.12.2.20  One on           
One 
Education 
 
 
 
SAR/Medical Review Program Workload DME MAC 
 
SOW  MR Activity  DME  DME Budget  Modifications/ 
Workload for  for this   Changes Since the 
this Period of  Period of  Previous IPRS 
Performance   Performance  
4.7.1  Automated Medical       
Review 
4.7.2  Non-Medical Record       
Review 
4.7.3  Demand Bill Claims       
Review 
4.7.4   Medical Review       
Reopening 
4.7.5  Prepay Medical Record       
Review Provider Specific 
4.7.6  Prepay Medical Record       
Review Service Specific 
4.7.7  Prepay Medical Record       
Review Probe Review 
Provider Specific 
4.7.8  Prepay Medical Record       
Review Probe Review 
Service Specific  SOW  MR Activity  DME  DME Budget  Modifications/ 
Workload for  for this   Changes Since the 
this Period of  Period of  Previous IPRS 
Performance   Performance  
4.7.10  Postpay Medical Record       
Review Probe Review 
Provider Specific 
4.7.11  Postpay Medical Record       
Review Probe Review 
Service Specific 
4.7.12  Postpay Medical Record       
Review Provider Specific 
4.7.13  Postpay Medical Record       
Review Service Specific 
4.7.17  Externally Directed       
Reviews 
4.7.18  Provider Compliance       
Group Directed Reviews 
4.7.22  One on One Education       
4.12  Defending MR Decisions       
at ALJ Hearings 
 
 
7.3.2.5.2 - Staffing and Workload Management 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
The MACs shall also detail in a narrative any significant fluctuations in staffing or issues 
with workforce management as appropriate since the previous IPRS.  
 
7.3.3 - Quality Assurance Plan 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
The SAR shall include a narrative section titled Quality Assurance (QA) that describes 
the QA processes actually used since the submission of the previous IPRS.  The QA  process information includes, but is not limited to, descriptions for continuous 
monitoring/surveillance and improvement of the following processes: 
 
  How the MAC  monitored the quality of reviews 
  Results of the IRR assessments of the MR licensed health care professionals 
clinical reviewers, and coders from the previous IPRS   
  How methods of data analysis were selected, validated and employed 
  How edit effectiveness was assessed for each prioritized problem (identify the 
MACs threshold for deeming an edit effective; discontinuing an edit) 
  How the MAC closely monitored the impact of MR activities and improper 
payment interventions specific to each problem on the prioritized problem list and 
their overall improper payment rate 
  How the MAC  recorded improvement opportunities for their internal use 
  How any new processes were introduced to their MR business operations 
  Any other information the MAC believes is pertinent to their QA efforts 
 
The narrative information shall not include a restatement from the IPRS; rather, the QA 
section should be used to communicate the QA processes used since the submission of 
the previous IPRS as well as those planned for future months. The MAC shall also 
include an explanation for changes in problem priority, rationale for changes in workload 
or budget, or new initiatives directed by CMS that required the MAC to suspend 
activities described in the IPRS. 
 
7.3.4 - SAR Submission 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
The MAC shall submit a SAR as directed by the SOW and COR.  The current SAR shall 
be updated or revised as required by the COR after review by the MR, CERT and POE 
BFLs and the RO TM staff. 
 
7.3.5 - SAR Revision 
(Rev. 599, Issued: 06-26-15, Effective: 12-07-15, Implementation: 12-07-15) 
 
The MAC shall notify their COR, RO TM and the MR BFL when their SAR requires a 
revision/update of the final approved SAR.  The revision/update shall be included in the 
current monthly status report under the A/B MAC Medical Review section, K7 and under 
the Medical Review section for the DME MACs.  The SAR revision shall be noted in the 
next strategy due deliverable.  This deliverable could be either the IPRS or SAR.  Transmittals Issued for this Chapter 
 
Rev #  Issue Date  Subject  Impl Date  CR# 
R10365PI 10/02/2020  Updates to Chapters 1, 2, 3, 4, 5, 6, 7, 8, 10,  08/272020  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 
R835PI  10/12/2018  One-on-One Education  11/13/2018 10963 
R721PI  06/09/2017  Elimination of Routine Reviews Including  07/11/2017 9809 
Documentation Compliance Reviews and 
Instituting Three Medical Reviews 
R663PI  07/15/2016  Denial Codes for Missing or Insufficient  08/16/2016 9690 
Documentation 
R642PI  02/22/2016  Medicare Program Integrity Changes - Pub.  02/16/2016 9497 
100-08 Chapter 7 
R633PI  01/15/2016  Medicare Program Integrity Changes - Pub.  02/16/2016 9497 
100-08 Chapter 7  Rescinded and replaced 
by Transmittal 642 
R607PI  08/12/2015  Workload Reporting  09/03/2015 9215 
R600PI  07/02/2015  Workload Reporting  Rescinded and  09/03/2015 9215 
replaced by Transmittal 607 
R599PI  06/26/2015  Annual Improper Payment Reduction  12/07/2015 9172 
Strategy (IPRS) 
R550PI  10/31/2014  One on One Education  12/02/2014 8964 
R444PI  12/14/2012  Retirement of the Program Integrity  04/01/2013 8093 
Management Reporting (PIMR) System 
R441PI  11/23/2012  Retirement of the Program Integrity  04/01/2013 8093 
Management Reporting (PIMR) System  
Rescinded and replaced by Transmittal 444 
R313PI  11/20/2009  Program Integrity Manual (PIM)  12/21/2009 6546 
Reorganization Chapters 1, 2, and 7 
R237PI  02/01/2008  PIMR Annual Update  03/03/200/  5706 
R229PI  11/23/2007  Medical Review Strategy and Strategy  04/07/2008 5760 
Analysis Report 
R220PI  08/24/2007  Various Medical Review Clarifications  09/03/2007 5550 
R203PI  05/25/2007  Strategy Analysis Report  07/02/2007 5519 
R174PI  11/17/2006  Transition of Medical Review Educational  10/06/2006 5275 
Activities  Rev #  Issue Date  Subject  Impl Date  CR# 
R171PI  11/03/2006  Transition of Medical Review Educational  10/06/2006 5275 
Activities  Replaced by Transmittal 174 
R163PI  09/29/2006  Transition of Medical Review Educational  10/06/2006 5275 
Activities  Replaced by Transmittal 170 
R103PI  02/04/2005  Discontinuation of Medical Review Reports - 03/07/2005 3701 
The Medicare Status Report MRS-1), the 
Report of Benefit Savings (RBS), the 
Medicare Focused Medical Review Status 
Report (MFSR), and the Focused Medical 
Review (FMR) Report 
R081PI  07/23/2004  Implementation of the Quarterly Strategy  08/23/2004 3294 
Analysis 
R073PI  05/07/2004  Business Requirements for CR3030  06/10/2004 2646 
R071PI  04/09/2004  Rewrite of Program Integrity Manual (except  05/10/2004 3030 
Chapter 10) to Apply to PSCs 
R062PI  01/23/2004  Focused Medical Review Report  04/05/2004 3062 
R052PI  10/10/2003  FY 2004 Conversion Factors for the Report  01/01/2004 2915 
of Benefit Savings 
R045PI  07/25/2003  FMR Activity Report  08/08/2003 2693 
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 
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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