12.24.09 – CMS Medicaid Integrity Contractor Audits

The Centers for Medicare and Medicaid Services (CMS) continue intensifying its pursuit of fraud, abuse and waste in federal healthcare programs. The Recovery Audit Contractor (RAC) audits focus on Medicare Parts A&B claims. Simultaneously with the RAC audits exists the Medicaid Integrity Contractors (MICs).

The Medicaid Integrity Contractors (MICs) are organizations contracted by CMS with the responsibility of auditing individuals and organizations providing Medicaid services. The overall goal of the provider audits is to identify overpayments and to ultimately decrease the payment of inappropriate Medicaid claims. These contractors are firms CMS has chosen to carry out education, review and audit with the following Medicaid Integrity Program goals:

  • Education MICs are responsible for educating providers, beneficiaries, and others on program integrity and quality of care issues.
  • Review MICs analyze Medicaid providers’ claims data for evidence of atypical billing practices that could result in overpayments.
  • Audit MICs conduct post-payment audits of Medicaid providers. The Audit MICs determine which providers to audit in part based on leads received from CMS, state agencies, or the Review MICs.

CMS has divided the country into five MIC jurisdictions, each of which encompasses two CMS regions. Contracts for Education MICs, Review MICs, and Audit MICs are awarded separately for each of the five MIC jurisdictions. The Audit MICs have commenced audits of Medicaid providers in most jurisdictions, and audits are anticipated to begin in the remaining jurisdictions by June 2010.

The audit process

All Medicaid providers are subject to MIC audits. Although Audit MICs, unlike RACs, are not paid on a contingency fee basis, Audit MICs are eligible for financial bonuses based on the effectiveness of their audits.

Review MICs perform post-payment reviews of Medicaid claims and then recommend selected providers to be audited by the Audit MICs. CMS is responsible for ensuring that investigations or other audits of these providers for similar Medicaid issues are not already underway by state Medicaid agencies, state or federal law enforcement, or Medicare contractors. Audit MICs can review

Medicaid claims as far back as permitted under the laws of the respective states that have paid the claims.

RACs vs. MICs

MICs have been termed “RACs for Medicaid,” but there are certainly differences between the programs. For example, the RAC lookback period is three years, but MICs base the length of time on individual state lookback guidelines. Similarly, the number of days a provider has to produce medical record copies for MICs is dependant on state rules, unlike with RACs, where providers have 45 days regardless of their location. In addition, MICs have no set medical request limits, while RACs max out at 200. Also, CMS will not reimburse providers for the cost of copying records, which is also different from the RAC program.

Unlike RACs, MICs are not paid by contingency fee, but rather through a sort of fee-for-service model. The dollars MICs recover aren’t tied to their compensation, according to CMS, although they will be eligible for bonuses based on how “effective and efficient” they are. In some cases MICs will do desk audits, and in other instances, auditors will come on-site to do the reviews.