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OPTOMETRIC ECONOMICS

Medicare improper payments recovery program expanding

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he U.S. Centers for Medicare & Medicaid Services(CMS) is expanding a program under which theagency uses outside auditors to check for improper

edicare payments and to seek repayment. The Recoveryudit Contractor (RAC) program is targeted primarily atospitals, which represent the largest portion (77%) ofedicare overpayment problems, according to the CMS.owever, it will also mean stepped-up auditing of Medicarehysician provider claims (which represent about 6% ofnaccurate claims), according to the agency.

The RAC program was authorized under the Medicarerescription Drug, Improvement, and Modernization Actf 2003. A demonstration project has been underwayince 2005 in California, Florida, and New York. Theuditing program will be expanded to Arizona, Massa-husetts, and North Carolina in 2008. The Tax Relief andealth Care Act of 2006 made the outside auditingrogram permanent and requires the program be ex-anded to all states by 2010.In fiscal year 2006, the 3 auditing firms contacted for

he demonstration project collected $68.6 million in over-ayments and also paid out $2.9 million to correct un-erpayments to health care providers. Under the demon-tration project, the auditors can check provider recordsor 4 years before the date on which a claim was paid.nder the permanent program, that was reduced to 3ears.CMS staff announced the expansion of the auditing pro-

ram during the August meeting of the Practicing Physi-ians Advisory Council (PPAC), an agency board com-osed of health care practitioners. Because health care

ptometric Economics is a monthly review of code and billing issuesrepared with the assistance of the AOA Eye Care Benefits Center. Theolumn is based on information from the U.S. Centers for Medicare &edicaid Services as well as other sources. Opinions expressed are not

ecessarily those of the American Optometric Association. AOA membersith questions regarding coding may contact AOA-ECBC staff person

he U.S. Centers for Medicare & Medicaidervices (CMS) plan to have a system ofrivate auditors checking for improperedicare claims in all 50 states by 2010.

heila Dwyer at (703) 837-1344 or SCDwyer@aoa.org.

529-1839/07/$ -see front matter © 2007 American Optometric Association. Alloi:10.1016/j.optm.2007.09.012

ractitioners represent such a small portion of improperedicare claims, some council members have asked prac-

itioners to be made exempt from the outside auditingrogram. However, CMS officials insist practitioners shoulde included under the program.A CMS Improper Payment Prevention Plan for physi-

ians, developed in part on the basis of auditing programesults in Florida, suggests agency administrators shouldncourage Medicare carriers to educate health care prac-itioners about coding rules and alert Medicare paymentontractors to potential pricing problems for certain typesf claims. The Florida program found problems withverpayments for multiple surgeries that occurred duringhe same surgical session and billing for more units thanere administered. The CMS plans to place the program

esults on its Web site, so that health care specialtyocieties can develop instructional articles for their mem-ers.As a result of the planned geographic expansion of the

uditing program, the CMS plans to postpone, at least untilarch 2008, a more detailed look at some of the more

omplicated areas covered in the audits, such as evaluationnd management codes, that health care practitioners useo code levels of office visits.

edically Unlikely Edits may be madeublic

n a related discussion during the PPAC meeting, CMS staffaid they may begin making information on their Medicareedically Unlikely Edits (MUE) program publicly avail-

ble. Under the MUE program, Medicare checks claims forbvious errors such billing for milliliters of a product sold initers or billing for 60 services when the provider meant toill for 6.The CMS said that the program is necessary because the

overnment spends billions of dollars on coding errors, aortion of which are typographical. Until now, the MUEsave been confidential, but program administrators are que-ying carrier medical directors, other agency officials, andther interested parties regarding possible public disclosuref MUEs. The PPAC has recommended that the MUEs beade available to the public.

oding and claim filing notes● 1500 (08-05) advisory—When using the new CMS-

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1500 version 08-05, health care providers who previ-

rights reserved.

Practice Strategies 681

ously populated boxes 17a (referring provider), 24j(rendering provider), and 33 (billing provider) withlegacy numbers should now use National ProviderIdentifiers, according to the CMS. If the information inblock 33 (billing) is different than block 32 (servicefacility), providers should populate block 32 with the

address information.

● New 09 POS code for correctional facilities—ThePlace of Service (POS) Code Sets have been updatedto include a Code, 09, for Prisons and CorrectionalFacilities. However, the code applies only to claims fordurable medical equipment provided in prison or cor-rectional facility settings. The new code is to be used

effective January 7, 2008.