The Centers for Medicare and Medicaid Services (CMS) had planned to award new contracts to companies that act as Medicare’s recovery audit contractors (now referred to as recovery auditors) (RAs) for operation of the Medicare recovery audit program by the end of 2014, which would have concluded the procurement process for new contracts that began in May, 2013. However, in a move all-too-familiar with providers, CMS announced recently that due to continued delays in awarding the new contracts, the existing contracts for the four private companies that act as Medicare’s RAs would be extended through 2015 (CGI Federal, Connolly, HealthDataInsights and Performant Recovery). Among the new contracts delayed due to a post-award protest was the contract awarded December 30, 2014, to Connolly, LLC for DME and Home Health and Hospice providers. In addition, CMS modified the existing RA contracts to allow the existing Medicare RAs to restart certain reviews that had stopped in 2014 pursuant to the old contracts’ terms, and to extend their work with CMS through April, 2017, to finalize all appeals and reconciliation.

Unfortunately, the contract extensions and modifications granted by CMS further delays its own efforts to usher in the next phase of the recovery audit program, and leaves providers waiting for long promised and much needed program improvements for at least another year. Looking ahead to the next phase of the recovery audit program, we have highlighted some of the program changes on page 3 that were published by CMS after evaluation of the many concerns raised about the existing program. The new requirements will be incorporated into all new RA contract awards, making them effective for any RA activities performed under new contracts entered into on or after December 30, 2014.

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Even after the new contracts incorporating these improvements are effective and begin to have an impact, past practices and trends with the recovery audit program are a good indicator that certain areas will continue to receive special attention by the RAs. Providers should closely monitor sources that reveal those trends and continue to focus on your facilities’ practices which have previously been considered high risk areas by the RAs.  These practices should be viewed as essential to your provider action plans to avoid being targeted and to ensure an effective response if you are audited. Whether your facilities are analyzing regulatory requirements and changes, reviewing compliance policies and procedures, formulating best practices, or making an assessment of any rights and duties or response plan post-audit notice, involvement of experienced legal counsel should be considered as an important resource.