Additional Documentation Limits Under Recovery Audit Program

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.