On October 18, 2013, CMS issued Transmittal 489, “100% Prepayment Review and random Review Instructions,” authorizing Medicare Administrative Contractors (MACs), effective November 19, 2013, to conduct 100 percent prepayment review of providers.  According to the transmittal, “CMS considers 100 percent prepayment review to be appropriate when a provider has a prolonged time period of non-compliance.”  Prior to conducting a 100 percent prepayment review, the MAC must inform the CMS Contracting Officer’s Representative (COR), Regional Office Technical Monitor (TM), and Business Function Lead (BFL), and the MAC must provide certain information to CMS, such as the background information on attempts to educate the provider, historical improper payment rate, expected length of time for the review, estimated number of claims and dollar value, and criteria for removing the provider from 100 percent prepayment review.  In the same transmittal, CMS indicated that while MACs have discretion to conduct random reviews (which are defined as reviews conducted without a specific reason or logic to substantiate the cause for review), CMS does not recommend random reviews.

To review a copy of Transmittal 489, please click here. 

Reporter, Lora L. Greene, New York, +1 212 556 2174, lgreene@kslaw.com.