Scope of Various Audits

Scope of Various Audits

What is the scope of the various types of audits? Who will be conducting the audits, and what are the look-back periods (the period of time in which an auditor can review claims that have been submitted for payment) for each audit?

 

SCOPE, AUDITOR, AND LOOK-BACK PERIOD
Name	Scope	Auditor	Look-back period
Medicare RACs Focus: Medicare overpayments and underpayments	Medicare RACs identify Medicare fee-for-service overpayments and underpayments and collect overpayments as well as return underpayments. Medicare RACs operate nationwide and only review issues approved for review by CMS.	The four Medicare RACs, each responsible for a U.S. region, are private companies that have contracted with CMS. Medicare RACs are paid on a contingency fee basis, receiving a percentage of both the overpayment and underpayments they correct.	Medicare RACs perform audit and recovery activities on a postpayment basis and may review a claim up to three years after the date the claim was filed.
Medicaid RACs Focus: Medicaid overpayments and underpayments	Medicaid RACs identify all providers’ underpayments and overpayments of Medicaid claims and recoup the overpayments. Medicaid RACs operate nationwide on a state-by-state basis. States have discretion to determine what areas of their Medicaid programs to target and are not required to publicly announce audit target areas.	Each state contracts with a private company that operates as a Medicaid RAC to perform audits of Medicaid claims. Individual states determine how each Medicaid RAC will be paid, usually on a contingency fee basis.	Medicaid RACs perform audit and recovery activities on a postpayment basis and may not review a claim more than three years after the date the claim was filed, unless the Medicaid RAC has approval from the state.
MICs Focus: Medicaid overpayments and education	MICs review all Medicaid providers to identify high-risk areas, overpayments, and areas for provider education to reduce Medicaid fraud and abuse.	MICs are companies contracted by CMS, which has divided the U.S. into five MIC jurisdictions, each encompassing two CMS regions. MICs are not paid on a contingency fee basis, but are eligible for financial incentives based on the effectiveness of their audits.	MICs perform audit and recovery activities on a postpayment basis and may review a claim as far back as permitted under the laws of the states that have paid the claims (generally a five-year look-back period).
ZPICs Focus: Medicare fraud, waste, and abuse	ZPICs investigate potential Medicare fraud, waste, and abuse and refer these cases to their associated MAC for recoupment or to other federal and state agencies for other penalties. The goal of ZPICs is to identify fraud, not to conduct random audits.	ZPICs are companies contracted by CMS, which has divided the U.S. into seven ZPICs jurisdictions, each aligned with one to two MACs. ZPICs are not paid on a contingency fee basis.	ZPICs have no specified look-back period.
MFCUs Focus: Medicaid fraud, waste, and abuse	MFCUs, which are annually certified by the OIG, investigate and prosecute (or refer for prosecution) criminal and civil Medicaid fraud cases.	Each state, except North Dakota, has an MFCU, which is jointly funded on a matching basis with the federal government.	MFCUs have no stated look-back period.
CERT Focus: Medicare improper payment rate	The CERT program identifies and estimates the rate of improper payments in the Medicare program and publishes an annual report describing national paid claims and provider compliance error rates. CERT program findings are not considered a measure of fraud because CERT randomly samples claims, rather than examining billing patterns that indicate potential fraud.	CMS runs the CERT program using two private contractors.	The CERT program reviews Medicare claims on a postpayment basis. The reviewed claims are limited to the current fiscal year (October 1 to September 30).
PERM Focus: Medicaid improper payment rate	The PERM program identifies and estimates the rate of improper payments in Medicaid and the Children’s Health Insurance Program. Individual state error rates are measured and are then combined to extrapolate a national error rate. The PERM program findings are not considered a measure of fraud because PERM randomly samples claims, rather than examining billing patterns that indicate potential fraud.	CMS runs the PERM program using two private contractors.	The PERM program reviews Medicaid claims on a postpayment basis limited to the current fiscal year (the complete measurement cycle is 22 to 28 months).

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