Medicare contractors will begin prepayment reviews of certain Medicare claims starting in January 2012 in several states, including New York.
The first of the three-year demonstration programs -- all beginning in January 2012 -- will allow Medicare recovery audit contractors to conduct prepayment reviews of certain claims in 11 states, including NY. RACs currently examine claims after they have been paid. Auditors will begin the pilot program by focusing on inpatient hospital claims, especially those for short stays, and conduct the reviews before payment is authorized, said Deborah Taylor, director of the Office of Financial Management at the Centers for Medicare & Medicaid Services.
The second demonstration program will require prior authorization for powered mobility devices in seven states (including NY). It will begin with prepayment reviews for every claim, then transition to prior authorization within a year.
The third demonstration program will provide hospitals a new avenue to recover inpatient Medicare claims that were denied because the wrong site of service was listed. Hospitals will be allowed to resubmit these inpatient bills as outpatient claims at a slightly reduced rate and avoid the existing appeals process that CMS said can be costly and time-consuming.
It is unclear at this point to what extent individual physicians will be targeted by these pilot programs.