Medicare Issues Contract to Another Compliance Auditor

If you are a healthcare provider, you know that Medicare auditors are part of the landscape. They have evolved and multiplied over the years: “Program Safeguard Contractors” became “Zone Program Integrity Contractors” and Recover Audit Contractors were added as an additional layer of review. We have become familiar with these ZPICs and RACs along with all the other government agencies or contractors who may review our claims, like the Office of Inspector General (OIG), the Medicare Administrative Contractors (MACs) and the Medicaid Integrity Contractors (MICs). But you may not be aware that now CMS has added another set of eyes to audit Medicare claims—the Supplemental Medical Review Contractor.

The acronym SMRC may be pronounced “smirk,” but it’s no laughing matter. This auditor has the same power as a ZPIC; they can select a random sample of claims and extrapolate the error rate from that review into an over payment based on the total amount of money you have received in the time frame of the audit. Basically, they can look at a small number of claims and recover a large amount of money.

So who is this new auditor and where did they come from? Strategic Health Solutions is the SMRC, but they were involved with CMS for years before being awarded this contract. In the past, Strategic has been involved with educational projects for Medicare, including reviewing and drafting materials for the MedLearn publications. In 2012 Strategic was granted the SMRC contract for the entire country and according to their press release, they feel that being able to review data on a national level will help them spot potential issues that will lead them to audit targets, allowing them to “lower improper payments to the Medicare program.”

Before the SMRC contract began in 2013 Strategic had only about 130 employees. They planned on adding 65 additional employees during that first year, followed by an additional 100 in 2014, and then getting up to a total of over 350 employees by 2015. Of course, the more they ramp up their staff, the more ability they have to conduct audits. That might be why I had never heard of them until 2017. According to the company website, they have been actively conducting audits (and you can see what types of providers they have reviewed in their “completed projects” section), but they have not focused on ambulance providers, until now. In the past month I have seen several SMRC audit letters. Their focus seems to be on non-emergent claims, but not necessarily on ambulance suppliers who only run non-emergent, they seem interested in any ambulance service that runs any amount of non-emergent transports.

Consider this your notice, there’s a new kid in town, and he’s auditing ambulance claims. If you get a letter from the “SMRC,” take it seriously, and respond timely and completely. What you send in can and will be used against you and may lead to a huge over payment assessment.

G. Christopher Kelly is an attorney who focuses on federal laws and regulations as they relate to the healthcare providers and specifically to the ambulance industry. Chris lectures and advises EMS service clients across the U.S. This article is not intended to be legal advice, for more information or specific questions, Chris can be reached at ckelly@emscltd.com .