Review Questions 40% of Auditor’s Decisions on Medicare Claims
CMS notified Congress on Friday that an independent review of a Medicare claims auditing firm disagreed with nearly 40% of the firm's denials of Medicare claims filed by California hospitals, the Sacramento Bee reports.
Such payments amount to tens of millions of dollars in reimbursements for the hospitals (Whitney, Sacramento Bee, 12/11).
Under a contract with CMS, PRG-Schultz International reviews Medicare claims submitted by hospitals to help root out improper payments.
The auditor has rejected more than 90% of the claims submitted by California hospitals for rehabilitation services to patients with knee and hip replacements. Under its CMS contract, PRG-Schultz receives up to a 30% commission on such claims.
PRG-Schultz is scheduled to expand permanently to 20 more states in March 2008. Along with California, the program is being piloted in New York and Florida (California Healthline, 11/26).
The large percentage of rejected claims prompted CMS to temporarily suspend PRG-Schultz's audits earlier this year and order an independent review of the firm's work.
In a letter to Congress on Friday, CMS acting administrator Kerry Weems said the suspension has been extended to March.
CMS attributed the inconsistencies in the independent review to differences in how the agency's policies were interpreted. Weems said that once auditors reach a common understanding of those policies, PRG-Schultz will be directed to review its rejected claims, including those under appeal.
Lee White, head of U.S. operations for PRG-Schultz, said, "Everybody wins if there are improvements and clarifications that result in a better program going forward."
Reps. Lois Capps (D-Calif.) and Devin Nunes (R-Calif.), co-authors of legislation to halt PRG-Schultz's operations for one year, said the CMS review was not sufficient and called for a more detailed investigation (Sacramento Bee, 12/11).
The bill would require Medicare administrators and the Government Accountability Office to review the program (California Healthline, 11/26).