CMS modifies DRG validation in 2010, based on RAC input

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In response to feedback from the Recovery Audit Contractors (RACs), providers/suppliers and their associations, the Centers for Medicare & Medicaid Services (CMS) has modified the additional documentation request limits for diagnosis-related group (DRG) validation purposes in the RAC program for FY2010.

According to CMS, the RAC program’s mission is to reduce Medicare improper payments through detection and collection of overpayments, the identification of underpayments and the implementation of actions that will prevent future improper payments.

The new limits will be set by each RAC on an annual basis to establish a cap per campus on the maximum number of medical records that may be requested per 45-day period. A campus unit may consist of one or more separate facilities/practices under a single organizational umbrella and each limit will be based on that unit's prior calendar year Medicare claims volume, according to CMS.

The agency said:

  • Limits will be based on the servicing provider's tax identification number (TIN) and the first three positions of the ZIP code where they are physically located. According to CMS, using TINs will reduce the total number of limits that would have been imposed per organization under the previous draft policy while factoring in ZIP codes will promote equitability for regional or national organizations.
  • Limits will be set at 1 percent of all claims submitted for the previous calendar year (2008) and divided into eight periods (45 days). The FY2010 limits are based on submitted claims, irrespective of paid/denied status and/or individual lines, although interim/final bills and RACs/final claims shall be considered as a unit.
  • Two caps will exist in FY2010: Through March 2010, the cap will remain at 200 additional documentation requests per 45 days for all providers/suppliers. However, from April through September 2010, providers/suppliers who bill in excess of 100,000 claims to Medicare (per TIN, across all claims processing contractors) will have a cap of 300 additional documentation requests per campus unit per 45 days.
  • Additionally, in FY2010 CMS will allow the RACs to request permission to exceed the cap. Permission to exceed the cap cannot be requested in the first six months of the fiscal year. The RACs must request approval from CMS on a case-by-case basis and affected providers will be notified prior to receiving additional requests.