Medicare claims are getting extra scrutiny now that the Centers for Medicare and Medicaid Services (CMS) is rolling out the Recovery Audit Contractor program (RAC).

RAC is a congressionally mandated program to identify improper Medicare payments and fight fraud, waste, and abuse. However, physician groups think it has failed to achieve its goal of eradicating frequent billing mistakes.

Beginning in March, RAC auditors are being phased in across the country.

IDSA was one of more than 100 state and national medical societies that sent a letter this month to the Centers for Medicare and Medicaid Services (CMS) arguing that the Recovery Audit Contractors (RAC) program is not an appropriate vehicle for reducing billing mistakes and improving payment accuracy. 

In their letter, the medical societies say that evaluation and management (E&M) codes are not appropriate for the program because the various levels of E&M services pertain to wide variations in skill, effort, time, responsibility, and medical knowledge—so much so that knowledgeable individuals often reach different conclusions about the level of service justified by the documentation.

The medical societies are also concerned about allowing contractors to perform audits on consultations, given physicians’ confusion over Medicare’s current policies on split-shared billing, transfer of care, and documentation for consultations.

Moreover, the letter says, auditing E&M services threatens to overburden physicians at a time when many specialties are in increasingly short supply and impending baby boomer retirements will exacerbate existing shortages.

The medical societies believe that physician outreach and education would be a better way to reducing billing and coding errors.

Encouragingly, a CMS official said at the IDSA Clinical Affairs Meeting this March that E&M claims with a one-level coding difference would not be challenged—at least for the first year or two of the RAC program.

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