(Medicare Program Integrity Manual)

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 determinatio n 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 p ayment 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 r ecord. 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 educat ion 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 th e 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 ADR s 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 reque st  **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 notific ation 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 hundr ed 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 severi ty 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 pr oper 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 re quirements.  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 rep resenting 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 re presenting 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 trai ning 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, Implementat ion: 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 gr oup 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 pr ovide 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.