Consistent with sections 1833(e), 1842(a)(2)(B), and 1862(a)(1) of the Social Security Act, the Centers for Medicare & Medicaid Services (CMS) is required to protect the Medicare program against inappropriate payments that pose the greatest risk to the program and take corrective actions.

To meet this requirement CMS contracts with fiscal intermediaries (FIs), carriers, Part A and Part B Medicare administrative contractors (A/B MACs), durable medical equipment Medicare administrative contractors (DME MACs), and Zone Program Integrity contractors (ZPICs) (replaced the Program Safeguard Contractors (PSC)) to perform analysis of fee-for-service (FFS) claim data to identify atypical billing patterns and perform claims review. These entities are referred to as Medicare contractors.

Medical review is the collection of information and review of medical records by Medicare contractors to ensure that payment is made only for services that meet all Medicare coverage, coding, and medical necessity requirements. Medical review activities are directed toward areas where data analysis indicates questionable billing patterns. Validating initial findings of the medical review evaluation may require additional review resulting in corrective action.

Goal of the Medical Review Program:

The goal of the medical review program is to reduce payment error by identifying and addressing billing errors concerning coverage and coding made by providers. To achieve the goal of the medical review program, Medicare contractors:

• Proactively identify patterns of potential billing errors concerning coverage & coding made by providers through analysis of data (e.g., profiling of providers, services, or beneficiary utilization) and evaluation of other information (e.g., complaints, enrollment and/or cost report data);

• Take action to prevent and/or address the identified error. Errors identified will represent a continuum of intent, and;

• Publish local medical review policy to provide guidance to the public and medical community about when items and services will be eligible for payment under the Medicare statute.

Progressive Corrective Action

PCA is an operational principle upon which all medical review activity is based. It serves as an approach to performing medical review and assists contractors in deciding how to deploy medical review resources and tools appropriately. It involves data analysis, error detection, validation of errors, provider education, determination of review type, sampling claims and payment recovery.
The contractor may use any information they deem necessary to make a prepayment or postpayment claim review determination. This includes reviewing any documentation submitted with the claim as well as soliciting documentation from the provider or other entity when the contractor deems it necessary and in accordance with our manuals.

Comprehensive Error Rate Testing (CERT)

CMS developed the Comprehensive Error Rate Testing (CERT) program to produce a national Medicare FFS error rate compliant with the Improper Payments Information Act. The CERT program measures the payment error rate for claims submitted to Medicare FFS contractors. Medicare contractors use CERT program information to determine which services are experiencing high error rates. The CERT process randomly selects a sample of Medicare FFS claims, request medical records from providers who submitted the claims, and reviews the clams and medical records for compliance with Medicare coverage, coding, and billing rules. The results of the reviews are published in an annual report. For more information about the CERT program and the annual reports refer to the Comprehensive Error Rate Test (CERT) and the Medicare Program Integrity Manual link below in the "Related Links Inside CMS" below.

The Medicare Program Integrity Manual, Pub. 100-08, Chapter 12 provides additional information on the CERT program. (See link to manual in "Related Links Inside CMS" below.)

National and Local Coverage Determinations

• National Coverage Determination (NCD)

Medicare coverage is limited to items and services that are reasonable and necessary for the diagnosis or treatment of an illness or injury (and with in the scope of a Medicare benefit category). The NCDs are developed by CMS to describe the circumstances for which Medicare will cover specific services, procedures, or technologies on a national basis. Medicare contractors are required to follow NCDs. If an NCD does not specifically exclude/limit an indication or circumstance, or if the item or service is not mentioned at all in an NCD or in a Medicare manual, it is up to the Medicare contractor to make the coverage decision.

• Local Coverage Determinations (LCD)

In the absence of a national coverage policy, an item or service may be covered at the discretion of the Medicare contractors based on a local coverage determination (LCD).

Section 522 of the Benefits Improvement and Protection Act (BIPA) defines an LCD as a decision by a FI or carrier whether to cover a particular service on an intermediary-wide or carrier-wide basis in accordance with Section 1862(a)(1)(A) of the Social Security Act (e.g., a determination as to whether the service or item is reasonable and necessary).

FIs, carriers, ZPICS, and MACs are Medicare contractors that develop and/or adopt LCDs. Medicare contractors develop LCDs when there is no NCD or when there is a need to further define an NCD. The guidelines for LCD development are provided in Chapter 13 of the Medicare Program Integrity Manual.

All NCDs, LCDs, local policy articles, and proposed NCD decisions are found in the Medicare Coverage Database.

Page Last Modified: 03/17/2009 10:58:41 AM
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