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CMS’ RACs Implementing a “Semi-Automated” Claims Review

The Medicare Recovery Audit Contractors (RACs) are introducing another weapon in their artillery: semi-automated claims review. Although semi-automated claims review is not specifically authorized by the RAC Statement of Work, the method is essentially a combination of an automated claims review and a complex claims review. CMS describes a semi-automated claims review in one of its frequently asked questions as follows:

It is a two-part review that is now being used in the Recovery Audit Program. The first part is the identification of a billing aberrancy through an automated review using claims data. This aberrancy has a high index of suspicion to be an improper payment. The second part includes a Notification Letter that is sent to the provider explaining the potential billing error that was identified. The letter also indicates that the provider has 45 days to submit documentation to support the original billing. If the provider decides not to submit documentation, or if the documentation provided does not support the way the claim was billed, the claim will be sent to the Medicare claims processing contractor for adjustment and a demand letter will be issued. However, if the submitted documentation does support the billing of the claim, the claim will not be sent for adjustment and the provider will be notified that the review has been closed.


For more information on Recovery Audit Contractors or any other audit processes, please contact Abby Pendleton, Esq. and Jessica L. Gustafson, Esq. at (248) 996-8510 or (212) 734-0128 or visit the HLP website.

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