Name Process Penalties Appeals process
CERT reviews a random sample of Medicare
fee-for-service claims submitted to MACs
and requests supporting records from
the providers who submitted the claims
for payment. The claims and associated
health care records are evaluated for
compliance with Medicare requirements.
The CERT RC is responsible for reviewing
medical records and compiling data
from the sampled claims. The CERT
SC then calculates improper payment
rates. Errors are assigned to claims
in instances of noncompliance
with medical records requests.
Once the review process is complete,
CERT contractors analyze the error-rate data and produce a national
Medicare fee-for-service error rate.
CERT contractors notify the
appropriate MAC of improper
payments identified through
the audit process. MACs
are then responsible for
recovering overpayments or
If a provider fails to submit the
necessary medical records to the
CERT program within 75 days of the
initial request, the claim counts
as an improper payment and may
be recouped from the provider.
A provider has the right to appeal
a CERT determination through the
five-level Medicare appeals process.
PERM is conducted over a three-year
period, focusing on 17 states per year. The
PERM SC draws random samples of fee-for-
service claims from each state and forwards
to the PERM RC, which is responsible for
requesting and reviewing supporting
medical records to validate compliance
with Medicaid and CHIP payment and
Using the data compiled in the medical
records review, the PERM SC then calculates
state and national improper payment
rates, and creates error analysis reports
to be used by states for corrective action
Following each PERM measurement
cycle, participating states are
required to develop and submit
a Medicaid and CHIP Corrective
Action Plan (CAP) to CMS. The CAP,
which is an outline of the steps
states will take to reduce improper
payments in each program, must
be submitted by states within 90
days of error-rate notifications.
If a provider fails to submit a
requested record to PERM, the
claim counts as an improper
payment and may be recouped
from the provider.
States may pursue two levels of
PERM error determination dispute:
the difference resolution process,
and the CMS appeals process.
These processes afford states the
opportunity to overturn PERM error
SMRCs conduct their review of medical
records based on an analysis of
national claims data compared to
data limited to a specific jurisdiction
controlled by one of the MACs. The
SMRC reviews all submitted documents
for evidence of improper payments.
SMRCs are responsible for notifying
CMS of any improper payments
and noncompliance. CMS, in turn,
will direct the appropriate MAC to
initiate claim adjustments and/or
overpayment recoupment actions
through the standard Medicare
overpayment recovery process.
Penalties, if any, are determined
by the appropriate MAC.
Providers may appeal the results
of an SMRC audit once they receive
overpayment demand letters
from their respective MACs.
TABLE 2. PROCESS, PENALTIES, AND APPEALS PROCESS, CONTINUED
AUG 2017 BULLETIN American College of Surgeons
WHAT SURGEONS SHOULD KNOW ABOUT...
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