CMS Pub. 100-08, ch. 3, § 3.2.1

This section applies to MACs and RACs, as indicated. RACs perform targeted reviews

consistent with their statements of work (SOWs).

The MACs have the authority to review any claim at any time, however, the claims

volume of the Medicare Program doesn’t allow for review of every claim. The MACs

shall target their efforts at error prevention to those services and items that pose the

greatest financial risk to the Medicare program and that represent the best investment of

resources. This requires establishing a priority setting process to ensure MR focuses on

areas with the greatest potential for improper payment.

The MACs shall develop a problem-focused, outcome-based MR strategy that defines

what risks to the Medicare Trust Fund the MAC’s MR programs will address and the

interventions that will be implemented during the fiscal/option year as addressed in PIM

chapter 7.

The MACs shall focus their edits where the services billed have significant potential to be

non-covered or incorrectly coded. Medical review staff may decide to focus review on

problem areas that demonstrate significant risk to the Medicare program as a result of

inappropriate billing or improper payments. The MACs shall have in place a program of

systematic and ongoing analysis of claims and data from RACs and CERT, among other

sources, in order to focus intervention efforts on the most significant errors.

The MACs shall initiate a targeted provider-specific prepayment review only when there

is the likelihood of sustained or high level of payment error. MACs are encouraged to

initiate targeted service-specific prepayment review to prevent improper payments for

services identified by CERT or RACs as problem areas, as well as, problem areas

identified by their own data analysis.

The MACs have the discretion to select target areas because of:

• High volume of services;

• High cost;

• Dramatic change in frequency of use;

• High risk problem-prone areas; and/or,

• RAC, CERT, Office of Inspector General (OIG) or Government Accounting

Office (GAO) data demonstrating vulnerability. Probe reviews are not required

when targeted areas are based on data from these entities.

To identify the claims most likely to contain improper billing, MACs are encouraged to

use prepayment and post-payment screening tools or natural language coding software.

MACs shall not deny a payment for a service simply because the claim fails a single

screening tool criterion. Instead, the reviewer shall make an individual determination on

each claim. MACs have the discretion to post the screening tools in use on their website

or otherwise disclose to the provider community. RACs shall use screening tools and

disclose their use to the provider community consistent with the requirements in their

statements of work (SOWs).

MACs and RACs shall NOT target a provider for review solely based on the provider’s

preferred method of maintaining or submitting documentation. For example, a MAC or

RAC shall NOT choose a provider for review based only on the fact that the provider

uses an electronic health record or responds to documentation requests using the

Electronic Submission of Medical Documentation (esMD) mechanism. (More

information about esMD can be found in Section (3.2.3.5)