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Medicare has recently added yet another review contractor to audit your claims – the Supplemental Medicare Review Contractor (SMRC). So why does CMS need so many contractors to fight improper payments and ensure compliance? And what are the differences between the different contractors? I am not sure the answers are really clear, but here is some information from a recent transmittal about the various contractors and their functions.

CMS Transmittal 508 updates the Medicare Program Integrity Manual to include information about the Supplemental Medicare Review Contractor. According to the manual update, SMRCs, along with CERT contractors, Medicare Administrative Contractors (MACs), and Recovery Auditors (RAs) are contracted by CMS to fight improper payments and promote provider compliance in the Medicare fee-for-service program.

CERT Contractors

The CERT program establishes error rates and estimates of improper payments (implemented as part of the Improper Payments Elimination and Recovery Improvement Act).

Medicare Administrative Contractors (MACs)

MACs prevent improper payments through initiatives to help providers comply with Medicare’s coverage, coding and billing rules. This is accomplished through provider education; pre-and post-payment claim review; and local coverage determinations (LCDs), articles, and coding instructions. The MACs use error rates and vulnerabilities identified through the CERT and RA programs to target their efforts.

Recovery Auditors

Because of the large volume of claims that Medicare processes and the difficultly with catching all improper payments, the RAs provide additional review to detect and correct improper payments to help protect the Medicare Trust Funds.

Supplemental MR Contractor (SMRC)

The SMRCs are a centralized medical review (MR) resource that can perform large volume MR nationally. They perform and/or provide support for a variety of tasks aimed at lowering the improper payment rates and increasing efficiencies of the medical review functions of the Medicare and Medicaid programs. The focus of SMRC reviews may include but are not limited to issues identified by CMS internal data analysis, the CERT program, professional organizations and other Federal agencies, such as the OIG/GAO and comparative billing reports. Their primary duties include:

• Serving as a readily available source of medical information to provide guidance in questionable situations, including questionable claim review situations
• Providing the clinical expertise and judgment to develop LCDs and internal MR guidelines
• Keeping abreast of medical practice and technology changes that may result in improper billing or program abuse
• Providing clinical expertise and judgment to effectively focus MR on areas of potential fraud and abuse

Are the differences between the contractors clear as mud? Yes, I thought so. But even so, you need to know who the Medicare contractors for your region are. You can find that information by using the Review Contractor Directory.

As the summer winds down and school is fast approaching, it takes me back to all the hours of taking notes, studying and then having to take tests. Just like a test in school is a reflection of
how well you have learned what you are being taught, in the world of Medicare & Medicaid Review Contractors the Comprehensive Error Rate Testing (CERT) Contractor performs audits to see how well Medicare Administrative Contractors (MACs) are adjudicating claims.

Error Rate Testing, a Historical Perspective:

• From 1996 through 2002 the HHS Office of Inspector General (OIG) estimated the Medicare Fee-for-Service (FFS) error rate.
• The Centers for Medicare and Medicaid Services (CMS) took over responsibility for the error rate measurement programs in FY 2003. At this time the sample size for the program increased from approximately 6,000 claims to approximately 120,000 claims thus allowing for the projection of a national error rate and for the first time for contractor and service level error rates.

CERT Review Process:

• The purpose of CERT reviews is to measure improper payments.
• The volume of claims reviewed is small.
• Claims are randomly selected from all claims submitted for payment.
• Claims reviewed are only post-payment complex reviews.
• The CERT Documentation Contractor requests medical records.
• If a provider does not submit the requested record, this counts as an improper payment and the payment is recouped from the providers.
• At least one nurse at the CERT Review Contractor will review the claim.
• Claims that are determined to be incorrect are scored as an error and payments are adjusted.
• Major Causes of Improper Claims includes:
• Missing Physician orders
• Illegible or missing signatures
• National Coverage Determinations (NCDs) or Local Coverage Determinations (LCDs) not being met; and
• The medical record does not support the medical necessity.

2010 CERT Report by the Numbers:

The CERT publishes an annual Improper Payment Report. The most recent report released November 22, 2011 reports the error rate and findings for 2010.

• The 2010 Medicare Fee-for-Service (FFS) paid claims error rate was 10.5% which equates to $34.3 billion in improper payments.
• Improper payments for inpatient hospital claims increased significantly from 2009 with inappropriate “place of service” errors accounting for a projected $5.1 billion.
• The Medicare Part B error rate decreased from 18.9% in 2009 to 12.9% in 2010.
• The Medicare Part A non-inpatient hospital claims decreased from 8.8% in 2009 to 4.2% in 2010.

What does the Medicare Administrative Contractor (MAC) do with the CERT Findings?

• Utilizes the findings to determine issues for Provider Education and Pre-Payment Reviews.

To learn more about the CERT visit the CMS CERT web page.