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David McGill Blogger

New Recovery Auditors Annual Report Released

Posted by David McGill | October 03, 2014

Medicare has just released its Recovery Auditors Annual Report for FY 2013. Unfortunately, we cannot understand the specific impact of RA activity on only orthotic and prosthetic claims based upon the published data. So with a focus on Part B/DME claims, of which O&P is a part, let's jump in and look at the major trends since FY 2011.

With only 3 years worth of data, we're dealing with small sample sizes. However a few specific points merit attention:

  1. The amount of overpayments identified by the RAs has climbed steadily every year, nearly doubling in 2013 when compared to 2012.
  2. In 2013, the Region A RA reviewed nearly two times the number of DME claims than the other 3 RA's combined. Region B, meanwhile reviewed roughly 90% fewer claims in 2013 than in 2012. Region C stayed nearly flat year over year, and Region D doubled the number of claims it reviewed.
  3. In 2013, Regions A and C collectively identified roughly $61M in DME overpayments, together accounting for 83% of all identified DME overpayments in 2013. Even more interesting, Region C identified roughly $5M more in DME overpayments than Region A, despite the fact that it reviewed only 1/3rd the number of claims as Region A. This suggests that the RA for Region C focused, relatively speaking, on higher dollar claims.
  4. The overall appeal percentages of denied claims remain remarkably low. Providers/suppliers appeal only 13.7% of initial RA decisions. That's too bad, because those who do submit redetermination requests win nearly 62% of the time.

​What does this mean for you?​ 

It's extremely difficult to predict future trends based on historical data, and that's even more true in this instance for two main reasons. First, we already know that the FY 2014 data will likely show significant decreases in overall RA activity based on the fact that the RA's went dormant for several months earlier this year. Second, the 2013 report confirms that a single, national RA will replace the 4 who currently conduct audits. So whatever trends we might have been able to extract from the historical data may be rendered irrelevant when that transition occurs. 

With those caveats, 3 thoughts for consideration:

  1. It would seem probable that Region B RA activity would increase in the future, as the 2013 data shows that it fell through the floor last year.
  2. One might conclude that Region C has strategically found the best balance of the 4 RA's between balancing audit workload while maximizing its "return on investment." While reviewing far fewer claims than the next most active RA, it identified farm more overpayments than the other 3. It will be interesting to see if the other RAs (and ultimately the yet-to-be identified national RA) follow Region C's lead.
  3. The data continue to show that if you take the time to appeal, you have a decent chance of winning. The nearly 62% national win rate at the redetermination level is surprisingly high. 
While controversial, the RAs are here to stay. With a federal court recently dismissing the American Hospital Association's lawsuit, no active lawsuits challenging the RAs' activities remain. 
We will keep you posted as we learn more about RA activity moving forward, as well as the status of an award for a national RA at some point in the future. 
NOTE: All data in this post taken from Recovery Auditing in Medicare for Fiscal Year 2013. If you would like to see the full report, click here.
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