CMS Launches New Fraud Audit Initiative

Earlier this month, the Centers for Medicare & Medicaid Services (“CMS”) introduced plans to implement a new strategy for fraud audits used by Medicare administrative contractors (“MACs”). Under the new program, MACs will target only those providers and suppliers with the highest claim error rates or billing practices that vary significantly from their peers. Current processes permit MACs to largely flag and challenge claims at random, which has led to a crushing backlog of pending appeals. The new program is designed to address such concerns.

It is expected that this new audit strategy will result in fewer providers and suppliers being subject to Medicare investigations for improper billing practices. This new audit process augments CMS efforts started in 2014 for “probe and educate reviews”, which combined a claims review with education to help reduce errors in billing practices. CMS has found that claim errors tend to decrease after providers and suppliers received education.

CMS plans to launch the audits in all MAC jurisdictions before the end of 2017.

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