CMS Proposes New Regulatory Language to Address Contractor Medical Review Requirements
In July 2021, the Centers for Medicare and Medicaid Services (CMS) released the following proposed rule: Medicare Program: CY 2022 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment Policies; Medicare Shared Savings Program Requirements; Provider Enrollment Regulation Updates; Provider and Supplier Prepayment and Post-Payment Medical Review Requirements (CMS-1751-P). While there are statutory provisions for medical review activities, there are no corresponding regulatory provisions. CMS proposes, within this proposed rule, adding regulatory provisions to include and address prepayment and post-payment medical reviews. (See, Section N, Paragraph 2).
CMS currently utilizes a variety of contractors to carry out its program integrity activities in the Medicare Fee-for- Service (FFS) program. These contractors include Medicare Administrative Contractors (MACs), Recovery Audit contractors (RACs), the Supplemental Medical Review Contractor (SMRC), Unified Program Integrity Contractors (UPICs), and the Comprehensive Error Rate Testing (CERT) contractor. These contractors use both prepayment and post-payment medical review to identify whether items or services are reasonable and necessary under section 1862(a)(1) of the Act and to recover improper payments. The MACs and UPICs perform prepayment medical review, while the MACs, RACs, SMRC, UPICs, and CERT all perform post-payment medical reviews.
The CMS contractors tasked with this responsibility are authorized to request additional documentation through multiple statutory authorities, including sections 1815(a), 1833(e) and 1862(a)(1)(A) of the Social Security Act (Act). Sections 1815(a) and 1833(e) of the Act provide that CMS cannot make payments to any provider or supplier unless it has furnished requested information to determine and support the amounts due. Under section 1862(a)(1)(A) of the Act, payment must generally be limited to those items and services that are reasonable and necessary.
Proposal for Regulations Governing Prepayment and Post-Payment Medical Review
While CMS has the statutory authority for their contractors’ activities, they lack regulatory provisions governing prepayment and post-payment medical reviews despite the existing operational practices being used by its contractors. The purpose of the proposed provisions is two-fold: to improve consistency among its contractors and to enhance provider/supplier understanding of the review process. Interestingly, CMS proposes these regulatory changes within the context of the Original Medicare (Parts A & B) appeal regulations found at 42 CFR § 405.900 et seq. and in chapter 29 of the Medicare Claims Processing Manual (Medicare Claims Processing Manual (cms.gov)).
Specifically, CMS proposes:
- key terms and definitions associated with prepayment and post-payment reviews;
- language codifying a contractors’ authority to request additional documentation within established timeframes; and
- provisions detailing a provider’s or supplier’s responsibility to comply with requests for additional documentation, including the impact should a provider or supplier fail to comply with a request.
Proposed Key Terms and Definitions
CMS is proposing to add the following key terms and their definitions to 42 CFR § 405.902, the existing “Definitions” provision of Subpart I—Determinations, Redeterminations, Reconsiderations, and Appeals Under Original Medicare (Parts A and B). CMS has indicated that these definitions would be consistent with longstanding manual language and common use of these terms by their contractors:
- “Additional documentation” means the information requested by a contractor when conducting a prepayment review or post-payment review;
- “Additional Documentation Request (ADR)” means a contractor’s initial documentation request in reviewing claims selected for prepayment review or post-payment review;
- “Post-payment medical review (or post-payment review)” means a review that occurs after payment is made on the selected claim to determine whether the initial determination for payment was appropriate; and
- “Prepayment medical review (or prepayment review)” means a review that occurs before an initial determination for payment is made on the selected claim to determine whether payment should be made.
Prepayment and Post-Payment Medical Review
Under the current regulatory framework, there is no provision at either 42 CFR § 405.903 or 42 CFR § 405.929. CMS is proposing to add these new sections to outline prepayment and post-payment medical review provisions. In these proposed sections, CMS sets forth the contractors’ authority to conduct prepayment medical review on selected claims in order to determine whether and how much payment should be made. Additionally, the section proposes to include the contractors’ authority to request additional documentation while conducting a prepayment review and that a provider or supplier will be provided 30 calendar days for a UPIC review and 45 calendar days for MAC reviews to submit additional documentation in response to a contractor’s request. These timeframes are not new, rather they reflect the current processing requirements of the different contractors.
For both prepayment reviews and post-payment reviews, contractors have historically had the authority to accept documentation received after the initial timeframe has expired based on good cause. This may include situations such as natural disasters, interruptions in business practices, or other extenuating circumstances that the specific contractor deems good cause in accepting the document after 30 or 45 calendar days.
Good Cause for Submitting Late Documentation
In an attempt to provide additional clarity with respect to establishing good cause for the late submission of additional documentation, CMS is proposing to revise current section heading of § 405.986(a) to read, “Establishing good cause for reopening” as opposed to continuing to use the current section heading, “Good cause for reopening.” This revision is meant to clarify the distinction made between the process for establishing good cause to reopen an initial determination made on a claim, and the good cause factors that may be applied in accepting documentation submitted after the applicable timeframes for purposes of medical review activity. CMS will not apply the good cause criteria for reopening an initial determination on a claim in § 405.986, rather they are adopting the criteria set forth in the new §§ 405.903 and 405.929 when addressing good cause for late submission of documentation in response to an ADR. Its important to keep in mind that the rule is still in the “proposed” state and provider and suppliers will need to look to the final rule (due out around the beginning of November, effective January 1, 2022) to understand what constitutes good cause for late submission of documents pursuant to an ADR.
Claim Denial for Failure to Respond to Additional Documentation Request
CMS is also proposing to add new § 405.930 to clearly outline their contractors’ authority to deny a claim should a provider or supplier fail to provide the additional documentation in response to an ADR. The proposed language is meant to provide clarity to the requirement that the contractor give the provider or supplier notice and time to respond to the additional documentation request. While CMS contractors have broad discretion to provide additional time in responding to an additional documentation request, the contractors also have the authority to deny additional time and the associated claim(s) when the additional documentation is not received within the requested timeframe.
While CMS is aware of the administrative burden to providers and suppliers in responding to these documentation requests, they remain stewards of the Medicare Trust Fund and have the responsibility to ensure that they reduce the number of improper payments being made to providers and suppliers. These new regulatory provisions should serve as a reminder to providers and suppliers that medical review is alive and well, and that there are consequences for not timely responding or not responding at all to an Additional Documentation Request (ADR). Its now more important then ever to Ensure Payment Accuracy and FutureProof your Claims before you receive an ADR.