Dear CUA members:

California along with Florida and New York have been selected to participate in a CMS pilot bounty hunter program to review previous Medicare payments. This new demonstration project has established PRG Schultz as the Recovery Audit Administrator (RAC) hired by CMS responsible for investigating previous bills and reimbursements. They are incentivized in this effort by sharing in collections of any overpayments they identify. Although they are also charged with reporting to the state carrier any evidence of underpayment, we have heard of no examples of this so far. Many of you have already received a demand for records with a cover letter from CMS explaining that your response is mandatory and compliant with HIPAA regulations. Unfortunately, it appears that the contractor has dramatically increased their volume recently and many are now receiving batches of requests that appear to focus on 2002 and 2003 claims for LHRH agonist therapy and Zometa treatments. The communications suggest that "a recent review and discovery of potential overpayment of your Medicare paid claims" prompted the investigation. However, there is no evidence that you have been actually singled out for any particular reason other than they are conducting large, random reviews of anyone who billed for these codes. Many other California physicians have also been targeted on issues unique to their specialties but there has been very little information about what edits this company is using, the qualifications of their reviewers or what exactly they are reviewing for. Although we in California have noted a significant increase in this activity, the other 2 states in this pilot have yet to document heavy volume although we have now asked members there to report their experiences to us in order to create a registry of RAC activities.

Many who have been contacted find the effort necessary to respond burdensome but if you do not comply with their request, they will automatically find you in default and can demand reimbursement of the money in question. The challenge is to decide how little documentation is necessary to meet their demand but is sufficient to make clear your "original treatment plan" or "physicians order" "specific to the claim, procedure and dates identified" in their request. We have no information at this time about what types of information or how much documentation is necessary to prove to these reviewers that your treatment was "reasonable and necessary as required by the Medicare statue", "met Medicare coverage requirements", and that "the charges submitted were processed and paid correctly". Use your best judgement depending on the nature and thoroughness of your documentation for the dates in question. However, if you find the effort burdensome or the RAC response inappropriate, please contact one or more of the following CMS representatives. If this program is found successful by Congress and CMS, there is no doubt they will extend it nationally and make it a permanent fixture. I will let you judge how this will impact your future participation with Medicare.

Additionally, please forward to me or the CUA your experience with RAC reviews: how many charts were requested; what dates were involved; what services or codes were reviewed; how long did it take the RAC to make a final determination; if that determination was unfavorable, how was the decision made, how was the appeal filed and what was the ultimate outcome. Please encourage your partners and associates to notify us as well. We will be working with the CMA, AMA, AUA, AACU and the other states targeted to create a profile of this program and PRG Schultz's performance in order to comment to CMS and Congress. I have already taken this subject up with the AUA board of directors through the Health Policy Council and brought it to the attention of MedPAC, the committee responsible for advising Congress on Medicare related issues.

Specific complaints about this program or the burden involved in replying to these requests can be directed to:

William Davis, VP of Healthcare
PRG Schultz
600 Galleria Parkway, Suite 100
Atlanta, GA 30339

or to

William Rogers MD, FACEP
Medical Officer, Office of the Administrator
Director Physicians Regualtory Issues Team
Center for Medicare and Medicaid Services
Department of Health and Human Services
202-236-3338
william.rogers@cms.hhs.gov
or prit@cms.hhs.gov

or to

Regional Office of CMS, Region IX
Division of Medicare Financial Management
75 Hawthorne St.
San Francisco, CA 94105
415-744-3658

CLICK HERE to view a copy of Dr. Kaufmans' letter to William Rogers, MD, FACEP, Medical Officer & Director, Physicians Regulatory Issues Team (PRIT), a group of CMS subject matter experts who work to reduce the regulatory burden on physicians who participate with the Medicare program.