We have seen a lot of RAC audit activity in Jurisdiction C from Connolly Healthcare requiring CPAP suppliers to provide copies of qualifying sleep test results. Early trends attribute audited claims to patients with PAP equipment where Medicare did not originally pay for the sleep study (perhaps the patient had prior coverage through a commercial plan).
You may remember a previous audit conducted by the Jurisdiction D RAC in early 2011 for Medicare covered sleep tests, where the RAC misinterpreted the language in the PAP LCD to mean that Medicare had to actually pay for the patient’s test. This has never been the case and the audit was proven to be invalid. The RAC ultimately issued refunds to audited suppliers and the LCD language was revised to clarify that sleep tests only need to show the patient “meets the Medicare coverage criteria in effect for the date of service of the claim,” not actually be paid for by Medicare.
It should be noted that the audits currently ongoing in Jurisdiction C are entirely different from the 2011 Jurisdiction D audit, and we do not expect to see a retraction. In this case, the Jurisdiction C RAC is only requesting that suppliers provide a copy of the patient’s qualifying test results to prove that a sleep test took place and has NOTHING to do with whether Medicare actually paid for the test.
The ongoing audits are semi-automated, meaning they are a cross between an automated and complex review. As with an automated review, claims are targeted for semi-automated review based on a software driven process, which identifies aberrant billing patterns (billing trends outside the norm). However, unlike automated reviews, there is only a suspicion that the supplier billed incorrectly. Since the RAC is not 100% sure an error has occurred, payment may not be automatically recouped, as would be done under a true automated review (i.e. payments after a date of death). This requires the RAC to send the supplier a letter requesting more information, as is done with complex reviews.
For the most part, semi-automated reviews are glorified complex reviews but with none of the protections. The supplier must send in additional information before the final determination is made (lack of response defaults to an overpayment and denial). However, unlike complex reviews, there is currently no limit on the number of semi-automated reviews a RAC may perform. Documentation request limits for complex reviews prohibit RACs from requesting records for more than 10% of your annual billing volume per 45-days, with a max cap of 250 records/45-days.
When we called Connolly Healthcare (the Region C RAC) to ask why there is no limit on record requests for semi-automated reviews, we were told that it is because a response to an “informational” request from a semi-automated review is optional, whereas response to a “documentation” request from a complex review is mandatory. Although if you ask us, there is nothing optional about responding to a semi-automated review if you want your claim to be paid.
You will know if you are selected for a semi-automated review by looking at the top of the review letter. If the bolded header says “Informational Letter” and the subject of the letter mentions “semi-automated review results are attached”, then the review is semi-automated, and you will have 45-days to submit information to support your claim. If you do not respond within the given time frame, the claim will be sent to your MAC for adjustment and a demand letter will be issued.
In the case of Jurisdiction C’s semi-automated CPAP reviews, all that is currently being requested is the sleep test itself. Suppliers may stave off recoupments by submitting a copy of the patient’s qualifying sleep test within 45-days of receiving the information request from the RAC. To be successful, the test must show a qualifying AHI or RDI (as defined in the PAP LCD), and that the patient was diagnosed with OSA.