Independent Contractor's Review of Fiscal Intermediary and Carrier Claims From the Fiscal Year 2008 Comprehensive Error Rate Testing Program

SafeGuard Services, LLC (SGS), complied with its CMS contract in performing medical reviews of a subsample of claims from the fiscal year (FY) 2008 Comprehensive Error Rate Testing (CERT) samples.' To help determine the annual Medicare error rate, CMS's CERT contractor conducts medical reviews of a sample of paid claims. CMS requires the CERT contractor to make medical review decisions in accordance with CMS's written policies.

However, SGS's results may not have provided CMS with assurance that the FY 2008 fiscal intermediary and carrier error rates were accurate.''Specifically, SGS found an additional 116 erroneous claims'that the CERT contractor had not initially determined to be in error. We were unable to quantify the statistical effect of SGS's results on the FY 2008 fiscal intermediary and carrier error rates. However, the SGS review identified enough incorrect determinations by the CERT contractor to warrant further corrective action by CMS to improve the Medicare error rate process.

We recommended that CMS (1) clarify documentation policies to reduce the number of differences in professional judgment, (2) require the CERT contractor to obtain physician orders to support the medical necessity for diagnostic tests in accordance with Medicare requirements, and (3) require the CERT contractor to develop a corrective action plan to reduce its number of incorrect determinations. In comments on our draft report, CMS concurred with our findings and recommendations and outlined the steps it has taken to begin implementing our recommendations.