CMS Announces Risk-Based Adjusted Additional Documentation Request Limits for Institutional Providers

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CMS Announces Risk-Based Adjusted Additional Documentation Request Limits for Institutional Providers

On May 3, 2016, CMS announced the supply of the revised approach to calculate additional documentation request (ADR) limits for Institutional Providers within the Recovery Audit Contractor (RAC) Program. Underneath the new method, which can be utilized by RACs instead of the baseline ADR limit, a provider’s “Adjusted ADR Limit” would vary in line with the provider’s denial rate, permitting RACs to request more documentation from providers rich in denial rates. The Adjusted ADR Limit could be recalculated every three 45-day cycles, and also the denial rate for that previous three cycles would determine the Adjusted ADR Limit for an additional three cycles. Based on confirmed provider’s denial rate, its Adjusted ADR Limit can vary from no reviews to overview of as much as 5 % of total compensated claims for an additional three 45-day cycles.

Underneath the revised ADR limits methodology, RACs might want to conduct reviews of the provider according to either the provider’s baseline annual ADR limit or even the Adjusted ADR Limit. The baseline annual ADR limit, which has been around since November 2015, will stay at .five percent. Thus, if your RAC uses the baseline annual ADR limit, the RAC may review a maximum of .five percent from the provider’s final amount of compensated Medicare claims from the previous 12-month period.

If, however, the RAC uses the Adjusted ADR Limit rather, the ADR limit for every three 45-day cycle period would vary with different provider’s denial rate within the preceding three 45-day cycles. The Adjusted ADR Limit rates and also the corresponding denial rates are listed below:

Denial Rate (Range) Adjusted ADR Limit (% of Total Paid Claims)
91-100% 5.0%
71-90% 4.0%
51-70% 3.0%
36-50% 1.5%
21-35% 1.0%
10-20% 0.5%
4-9% 0.25%
0-3% No reviews for three 45-day review cycles

The denial rate represents the amount of claims that contains improper payments (less any determinations which are fully overturned on appeal) divided through the final amount of reviewed claims.

CMS’s announcement from the new ADR methodology can be obtained here.

Reporter, Igor Gorlach, Houston, 1 713 276 7326, [email protected]

 

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