Additional Documentation Limits Under Recovery Audit Program

Additional Documentation Limits Under Recovery Audit Program

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On May 3, 2016, the Centers for Medicare and Medicaid Services (CMS) issued an update to the additional documentation request (ADR) limits for Medicare institutional providers under the Medicare fee-for-service (FFS) recovery audit program, which will allow recovery audit contractors (RACs) to request more documents from providers who have high claims denial rates.

For example, a provider with a 0 to 3 percent denial rate will receive no additional RAC document requests for three 45-day review cycles, while providers with denial rates between 91 percent and 100 percent could potentially receive RAC document requests of up to 5 percent of their paid claims. A baseline annual ADR limit is established for each provider based on the number of Medicare claims paid in a previous 12-month period. Using the baseline annual ADR limit, which is one-half of one percent (0.5%) of the provider’s total number of paid Medicare claims from a previous 12-month period, an ADR cycle limit is also established. After three 45-day ADR cycles, CMS will calculate (or recalculate) a provider’s denial rate, which will then be used to identify a provider’s corresponding “Adjusted” ADR limit. Recovery auditors may choose to either conduct reviews of a provider based on their adjusted ADR limit (with a shorter look-back period of six months) or their baseline annual ADR limit (with a longer look-back period of three years).

Questions concerning this update can be submitted via email.

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