CMS Issues Instructions for Prepayment Review of Claims

Date posted: November 7, 2013

The Centers for Medicare & Medicaid Services (CMS) recently issued instructions for Medicare Administrative Contractors (MACs) on random reviews and 100 percent prepayment reviews.  CMS does not recommend random reviews, although MACs have the discretion to conduct random reviews.  As such, CMS instructed MACs to notify the agency of its intent to conduct random reviews.

For 100 percent prepayment review, CMS considers this review to be appropriate when a provider is non-compliant with CMS policies for a prolonged period of time.  Prior to conducting a 100 percent prepayment review, a MAC must inform CMS personnel and provide the following:

  • Background information on attempts to educate the provider.
  • Past improper payment rate of the provider.
  • Length of time the provider is expected to be on 100 percent prepayment review.
  • Expected number of claims and the dollar value of claims expected to be reviewed per month.
  • Criteria for removing the provider from 100 percent prepayment review.

The instructions will be implemented and take effect on November 19, 2013.


CMS’ instructions on prepayment reviews is available at:

http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R489PI.pdf.

Centers for Medicare & Medicaid Services.  “100% Prepayment Review and Random Review Instructions.”  Transmittal 489.  18 Oct. 2013.

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