Recovery Auditor Prepayment Review Demos Imminent

James Carroll, for HealthLeaders Media, August 10, 2012

The Recovery Auditor prepayment review demonstration, announced last fall and delayed for months, will launch on August 27, the Centers for Medicare & Medicaid Services has announced.

In this demonstration, Recovery Auditors will conduct prepayment reviews on certain types of claims that historically result in high rates of improper payments. The following seven states, home to high populations of fraud- and error-prone providers, will be subject to the demonstration: Florida, California, Michigan, Texas, New York, Louisiana, and Illinois.

Four additional states with high claims volumes for short inpatient stays will also be subject to the program: Pennsylvania, Ohio, North Carolina, and Missouri.

Target areas and focus
In addition to short hospitals stays as a target of the comprehensive error rate testing (CERT) report, CMS identified three specific areas of focus in the prepayment review demonstration:

• Incorrectly coded claims
• Patients who came through the emergency department but should have subsequently gone to observation rather than being admitted
• Patients who received elective surgery during short-day stays when they should have been outpatient procedures

CMS released further details on the areas of focus for the program in December.