Monitor Medicare Medical Reviews to Prepare for RACs

on Tuesday, 10 February 2009. All News Items

Medicare contractors (FIs and MACs) perform pre- and post-payment medical reviews on provider claims.  Starting in 2008, this includes review of inpatient claims that were previously reviewed by the QIO.  It is also likely that contractors will increase their medical review activities as their payment processes are under increased scrutiny from CERT, OIG, and now RAC audits.  Monitoring your Medicare contractor’s medical reviews can assure that you are responding appropriately to records’ requests and will provide valuable information to help you identify billing and documentation opportunities for improvement.  Taking corrective actions based on the medical review findings will make your claims more compliant with Medicare regulations and better prepare you for future reviews such as RAC and CERT audits.

Providers are notified of requests for medical records for prepayment medical review purposes only through Additional Development Requests (ADRs) via the Fiscal Intermediary Standard System (FISS).  There is no hard copy notification; only electronically through FISS.  You should have procedures in place to ensure that the FISS system is checked at least weekly for ADRs.  Medical records should be submitted within 30 days.  If records are not received by the FI within 45 days, the claim will be denied.  Please click on the link below for more information concerning the ADR process:
Additional Development Request (ADR) Quick Reference Tool

You should carefully review the contents of the medical record before submitting it to Medicare to verify that documentation to support all services billed is included, such as physician’s orders, nurses’ notes (when needed) and tests results.  Review the charges to determine if any of the services have special requirements, such as NCDs or LCDs and be sure to include documentation to support those requirements.  For example, if the drug EPO was given, include documentation of the hemoglobin or hematocrit; include documentation of the administration of drugs given; include a signed physician’s order for all diagnostic services, such as lab and radiology tests; verify that the status billed (inpatient or outpatient) matches the physician’s order; and for inpatient admissions, include any documentation by Case Managers and the Physician Advisor concerning medical necessity of the inpatient admission status.

Keep a log of the ADR requests and have someone check FISS for the results of the review.  Medicare has 60 days to complete the review but if records are submitted timely, most reviews are completed sooner. (Recommendation: check weekly beginning about 30 days after records are submitted.)  The rationale for payment or full or partial denial is listed on page 4 of the FISS claim.  This rationale provides valuable information about what was right or wrong with your medical record in supporting Medicare reimbursement. 

If your claim was denied and you agree with the determination, use the information from the denial to change practices at your facility for future claims.  You may need to provide education or training, improve documentation, correct errors in the chargemaster, or change billing or coding processes.  If your claim was denied and you disagree with the determination, submit an appeal.  Information about the appeals process can be found at this link:

You may also find it valuable to keep track of the amount of charges that are denied as this may show the scope of certain issues for your facility.  Also check the Medicare contractor’s website ( for Alabama hospitals) for information about findings of widespread focused reviews.  Monitoring and tracking the results of Medicare contractor’s medical reviews is the same type of process you will want to have in place once RAC audits begin.  This will give you valuable practice with the process as well as important information about your compliance with Medicare regulations.

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