CMS Revamps Medicare Audit Strategy

Good news for some healthcare providers and not so good news for others. The Centers for Medicare & Medicaid has announced changes to its Medicare audit strategy in an effort to root out fraud and abuse.

The new process is based on a pilot program that CMS introduced in 2014 in which the agency combined a review of a sample of claims with education to help reduce errors in the claims submission process. CMS called it “Probe and Educate.”

Under the revamped plan, using data analysis, Medicare Administrative Contractors (MACs) will focus on specific providers and suppliers within a service, rather than all providers and suppliers billing a particular service.

Previously, MACs were randomly flagging and challenging claims, which is, in part, what has led to an ever-growing backlog of appeals, which according to published reports stood at 607,402 as of June.

As an aside, earlier this month an appeals court revoked a court-ordered timeline that required the backlog to be cleared by 2021 and remanded the case back to the lower court judge to determine whether HHS’ claim that complying with the timeline would in fact be impossible.

CMS says under this more targeted auditing approach “MACs will focus only on providers/suppliers who have the highest claim error rates or billing practices that vary significantly out from their peers.” In other words, if you are doing it right, you should be okay.

CMS notes: “This eliminates burden to providers who, based on data analysis, are already submitting claims that are compliant with Medicare policy.”

The review will work like this: The TPE review and education process includes a review of 20-40 claims followed by one-on-one, provider-specific, education to address any errors with in the provider’s reviewed claims. Providers/suppliers with moderate and high error rates in the first round of reviews, will continue to a second round of 20-40 reviews, followed by additional, provider specific, one-on-one education. Providers/suppliers with high error rates after round two will continue to a third and final round of probe reviews and education

CMS will expand this program to all MAC jurisdictions this year. If you have any questions or concerns about this new strategy, The Health Law Offices of Anthony C. Vitale can assist you. Call us at 305-358-4500 or send an email to and let’s discuss how we might be able to help.

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