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CMS OKs 'Medical Necessity' Reviews for RAC

James Carroll, for HealthLeaders Media, August 12, 2010

The long wait for medical necessity Recovery Audit Contractor (RAC) reviews will soon be over. The Centers for Medicare & Medicaid Services (CMS) has approved the first "medical necessity review" audits for the recovery audit contractor (RAC) program, according to a statement by the American Hospital Association(AHA).

"This should certainly not come as a surprise to providers," said Debbie Mackaman RHIA, CHCO, regulatory specialist for HCPro, Inc. "We've been waiting for these reviews since the implementation of the permanent program, often wondering what might be taking so long."

CMS takes the position that the decision to admit a patient is a "complex medical judgment" made by the patient's physician after consideration of the severity of the signs and symptoms; medical probability of an adverse outcome for the patient; and the need and availability of diagnostic studies.

A RAC will have to find clear evidence in the medical record using CMS and clinical guidance to make the opposing determination that the physician's judgment was correct, according to Mackaman.

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