Medicare auditing program is halted
Source: By David Whitney, Sacramento Bee (CA), Thursday, September 27, 2007
Medicare officials have declared a temporary "pause" in a controversial auditing program that has put a strain on dozens of California rehabilitation hospitals forced to surrender tens of millions of dollars on allegations that the care they provided elderly patients was medically unnecessary.
....... The association has been the leading critic of the program and the California contractor, Atlanta-based PRG-Schultz International, because of its rejection of almost all Medicare claims involving elderly patients treated at rehabilitation hospitals after knee or hip replacement.
...... The audit program was established as a test by Congress in 2002 in an effort to reduce unnecessary Medicare spending. It took effect in 2005 in three states -- California, New York and Florida, all high-cost Medicare states. But rather than being paid a fee for their work, auditors are paid commissions of between 25 percent and 30 percent of the money they collect from rejecting claims as far back as five years. In the case of PRG-Schultz, its contract permits it to keep the bounty so long as its decisions are not overturned at the first and second stages of administrative review. The reversals, however, are coming in the third stage.