CMS Rescinds PWC RAC Audits on Older Claims

The Centers for Medicare and Medicaid Services (CMS) has communicated through its recovery audit contractors in recent days that certain recovery audits that have been generated on power wheelchairs, support surfaces and prosthetics have been rescinded. In a letter obtained by a VGM member, the recovery audit contractor lists a series of claims that had been in the preliminary stages of identified overpayments from 2010-12 that have now been rescinded. The RAC does reserve the right to audit these claims in the future.

There has been no official release from CMS on which claims are no longer subject to audits, nor the rationale behind doing away with the older claims audits. VGM has been able to verify that all four regional DMEMAC jurisdictions have begun sending letters to providers explaining the situation. Though the details on exactly which claims and an estimated time line associated with the rescinded claims are not yet apparent, we are confident in saying that power wheel chairs, support surfaces and orthotics/prosthetics are included in the updated policy change.

The rationale behind the decision to rescind certain claims is conjecture at this point, but VGM is confident in saying that industry efforts contacting congress and the recent Small Business Administration Regulatory Fairness hearing featuring multiple VGM members testifying about the impact of audits on their business succeeded in raising the profile of the issue. It is also thought that there were so many audits piling up from the contractors that the regional DMEMAC’s could not keep up with the increased volume moving forward. A combination of all three likely led to the recent change.

While there are likely many reasons why CMS decided to make this important policy change, there are several questions still left unanswered. What happens to audits that are currently awaiting an appeal to the Administrative Law Judge? Will CMS be refunding overpayments already collected on claims audits prior to August 2011? Will there be new audit programs? And, most important, if the RAC reserves the right to audit these claims in the future, how does a provider protect themselves now?

As more information from CMS becomes available, VGM will continue to keep you informed of new developments. Audits are not going away, but this is a small step in the right direction. Durable medical equipment providers need to keep the pressure on CMS and Congress to ensure this system is working to identify fraud, rather than punishing quality providers.

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