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RACs to begin medical necessity reviews

August 10, 2010

The Centers for Medicare & Medicaid Services' New Issue Review Board last week approved the first "medical necessity review" audits for Medicare's permanent recovery audit contractor program, the AHA learned today. The newly approved audits include 18 types of inpatient hospital claims and one type of durable medical equipment claim. The particular Part A hospital claims and which of the four regional RACs will conduct them have yet to be announced. Before issuing Additional Documentation Requests to hospitals for these reviews, each RAC must post on its website the particular audits it will conduct, including citations for the related Medicare policy. CMS expects the RACs to post the new audits and begin issuing ADRs within the next two weeks. The AHA encourages hospitals to monitor their RAC's website for information on these new audits. (Contact information for the four regional RACs can be found at www.aha.org/aha/issues/RAC/contractors.html.) Many problems related to medical necessity reviews occurred during the three-year RAC demonstration, including the key concern that RAC auditors may lack adequate clinical and Medicare knowledge to determine whether prior hospital care was reasonable and necessary.