CMS Publishes Final Rule on Non-Random Prepayment Complex Medical Review

On September 26, 2008, the Centers for Medicare & Medicaid Services (CMS) published a Final Rule in the Federal Register establishing the criteria that CMS contractors will use for terminating a provider or supplier from non-random prepayment complex medical review.  The Final Rule is effective on January 1, 2009.

Unless an exception applies, the Final Rule generally provides for providers and suppliers to be removed from non-random prepayment complex medical review if they meet either the rule's 70 percent reduction in error rate criterion or have been on review for 1 year from the initiation of such review.  The Final Rule does not specify a minimum timeframe that a provider or supplier must be on review and suggests that a provider or supplier may also be removed at any time at the discretion of the CMS contractor.

The Final Rule defines "non-random prepayment complex medical review" as the prepayment medical review of claim information and medical documentation, by a licensed medical professional, for a billed item or service identified by data analysis techniques or probe review to have a likelihood of sustained or high level of payment error.  For additional information, see the Final Rule.

The Medicare Prescription Drug, Improvement and Modernization Act of 2008 (MMA) amended Section 1874A of the Social Security Act by adding a new subsection regarding random and non-random prepayment reviews, and requiring CMS to establish termination date(s) for non-random prepayment complex medical reviews.  On October 7, 2005, CMS published a Proposed Rule proposing the criteria that CMS contractors would use for terminating providers and suppliers from non-random prepayment review under the MMA.