CMS Pub. 100-04, ch. 3, § 20.1.2.9

Effective April 1, 2008, QIOs are no longer performing the majority of medical review for

payment of acute inpatient prospective payment system (IPPS) hospital and long term care

hospital (LTCH) claims. These reviews are the responsibility of the A/B MACs (A). An

exception occurs when a provider requests a higher-weighted DRG review from the QIO.

The QIO will continue to perform those reviews.

The A/B MAC (A) may review a sample of cost outlier cases after payment. The charges for

any services identified as non-covered through this review are denied and any outlier

payment made for these services is recovered, as appropriate, after a determination as to the

provider’s liability has been made.

If the A/B MAC (A) finds a pattern of inappropriate utilization by a hospital, all cost outlier

cases from that hospital may be subject to medical review, and this review may be conducted

prior to payment until the A/B MAC (A) determines that appropriate corrective actions have

been taken.

When the A/B MAC (A) reviews cost outlier cases, they shall do so using the medical

records and itemized charges, to verify the following:

1. The admission was medically necessary and appropriate;

2. Services were medically necessary and delivered in the most appropriate setting;

3. Services were ordered by the physician, actually furnished, and not duplicatively

billed; and

4. The diagnostic and procedural coding are correct.

Where the A/B MAC (A)’s decision changes previously processed bills, an adjustment bill is

prepared to correct the bill.

When the hospital provides the A/B MAC (A) with medical records for cost outlier review,

the hospital must indicate the precise revenue code for each charge billed. In case

adjustments are needed, revenue codes are necessary to ensure proper accounting for cost

report purposes. It is not acceptable for the hospital to merely provide listings of revenue

codes expecting the A/B MAC (A) to assign the charges to the appropriate code. If the

correct revenue codes are not provided, the A/B MAC (A) will deny the bill.