Providers nationwide are certainly familiar with Recovery Audit Contractors, or RACs. But perhaps less familiar are Medicaid Integrity Contractors, or MICs. These MICs have yet to hit every state, but the program will be rolled out to the entire country this year and audits are now under way or coming soon.
In light of the nationwide MIC rollout, CMS recently updated its Web site with three informative notices to help providers understand key concepts and timelines.
In 2005, the Deficit Reduction Act created the Medicaid Integrity Program in section 1936 of the Social Security Act, which increased government responsibility pertaining to Medicaid fraud and abuse. Section 1936 requires CMS to contract four program integrity focuses: Reviewing provider actions; audit claims; identifying overpayments; and educating providers, managed care entities, beneficiaries and others with respect to payment integrity and quality of care.
As a result of this requirement, CMS entered into contracts with a number of entities to perform those functions. These contractors are known as MICs, and there are three different types (education, review, and audit MICs) whose goal is to identify Medicaid fraud and abuse by auditing claims and identifying overpayments.
The goal of audit MICs is similar to that of RACs, which is to identify improper payments and ultimately decrease the inappropriate payments altogether. However, there are a number of differences between the two contractors, starting with the fact that MICs have no set medical request limits, while RACs have a 200 per 45 day limit.
MICs also base the length of lookback guidelines on individual state guidelines, while RACs have a set period of three years. Additionally, MICS aren't paid by contingency fee like RACs; they are compensated through a sort of fee-for-service model where they are eligible for bonuses based on how effectiveness and efficiency, according to CMS.
CMS has divided the country into distinct regions, each with its own MIC, in order to streamline the process. The regions are as follows:
- Regions I/II: Connecticut, Massachusetts, Maine, New Hampshire, New Jersey, New York, Puerto Rico, Rhode Island, Vermont, and the U.S. Virgin Islands. The MIC for this region is Thomson Reuters.
- Regions III/IV: Alabama, Washington D.C., Delaware, Florida, Georgia, Kentucky, Maryland, Mississippi, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, and West Virginia. The MIC for this region is Thomson Reuters.
- Regions V/VII: Iowa, Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska, Ohio, and Wisconsin. The MIC for this region is AdvanceMed.
- Regions VI/VIII: Arkansas, Colorado, Louisiana, Montana, North Dakota, New Mexico, Oklahoma, South Dakota, Texas, Utah, and Wyoming. The MIC for this region is Thomson Reuters.
- Regions IX/X: Alaska, American Samoa, Arizona, California, Guam, Hawaii, Idaho, Northern Marianna Islands, Nevada, Oregon, and Washington. The MIC for this region is Thomson Reuters.
What happens when you receive a notification letter
CMS states that providers are audited based on the data analysis done by the Review MICs. Upon receipt of a notification letter, the first thing a provider should do is gather the requested documents as instructed. These requests may include copies of provider records, interviews with providers and office personnel, and access to the facility. Providers will generally have at least two weeks before an audit begins to gather the requested documents.
When gathering these documents, the audit MICs will remain mindful of state requirements concerning record production and may accommodate reasonable requests for extensions for these requests so long as neither the integrity nor timeliness of the audit is compromised.
Within these notification letters will be a primary point of contact at the Audit MIC if there are specific questions about the letter and process. The last step, after receiving a letter involves setting up an entrance conference to communicate relevant information to the provider, including a description of the audit scope and objective. The Audit MIC will set up this conference.
What to do during and/or after the audit
Although some audits will take place at the provider's location, the majority of them will be done at the MICs own office, which is known as a desk audit. CMS policy states that the provider be given the same amount of time to produce requested records as the State Medicaid agency allows in its own provider audits.
Following the audit's conclusion, an exit conference is scheduled through the audit MIC. The purpose of an exit audit, which can be done by phone or in person, is to review a summary of audit findings and potential conclusions. The provider is given the opportunity to comment on these findings, and if the MIC concludes that there was an inappropriate payment, a draft report will be prepared, according to CMS.
Handling the draft report stage
Following CMS approval, the draft report is sent to the state for approval for review and comment, and following that, sent to the provider as well. If deemed necessary, the report is revised accordingly and sent back to the state.
After the review stages of the report, the report is adjusted accordingly, and the provider will be given credit for payments, when applicable. All comments and concerns are addressed and given full consideration, and CMS aims to reach consensus with the state in all situations. CMS, however, has the final say in determining inappropriate payments in any audit. At this point, the draft report is finalized.
What happens during the final stage
During this period, CMS sends the final report to the state, which serves as the official notice of discovery and identification of an overpayment. Under federal law, the state must repay the federal share of the overpayment to CMS within 60 days, whether or not the state recovers, or seeks to recover, the overpayment from the provider.
The provider may exercise whatever appeal or adjudication rights are available under state law when the state seeks to collect the overpayment amount identified in the report, according to CMS.
CMS has put information online to help providers with MICs, including a program provider audit fact sheet, an A to Z review, and procurement and implementation timeline.
James Carroll is associate editor for the HCPro Revenue Cycle Institute.