Medicare Changes Manual Medical Review to Post-Payment

March 24, 2014

Due to the issuance of new contracts for Recovery Audit Contractors (RACs), the Centers for Medicare & Medicaid Services (CMS) announced it will only perform post-payment manual medical reviews for therapy services provided over $3,700 for dates of service that began February 28, 2014.

ASHA and the therapy advocacy community were notified by CMS of this clarification on March 19, 2014.

Current RACs are instructed to stop processing initial Additional Documentation Requests (ADR) in February, and Medicare Administrative Contractors (MACs) will stop notifying RACs of pre-payment reviews with dates of service after February 28. All claims will be processed and documentation requests held for post-payment review by new contractors once contracts have been implemented. The last date for the current RACs to send payment adjustment recommendations to the MACs is June 1, 2014.

The manual medical review process legislation expires on March 31, 2014. If Congress extends the review for 2014, CMS anticipates that the post-payment process will continue. Those providers in pre-payment states will likely not switch back from post- to pre-payment again in 2014. CMS was unable to release any time frame for the new RAC contracts.

Speech-language pathologists should continue to respond to ADRs and be aware that services provided over the $3,700 threshold (for physical therapy and speech-language pathology services combined) may eventually require justification and possibly a re-payment of funds if found to be not medically necessary.


In 2012, a manual medical review process for Medicare Part B therapy services that exceed a $3,700 threshold was mandated by the Middle Class Tax Relief and Job Creation Act of 2012 and was extended until March 31, 2014. The mandate requires any therapy claims for combined speech-language pathology and physical therapy that reach $3,700 to be reviewed for medical necessity. After some difficulty with the MAC reviews, CMS determined that the RACs were better equipped for the review process and, beginning April 1, 2013, initiated pre- and post-payment review processes implemented by states.

Providers in post-payment states receive payment prior to review, with the risk of the recovery of funds after medical review. Under the previous process, claims in pre-payment states were stopped prior to payment and awaited review, and then were paid. Pre-payment states included Florida, California, Michigan, Texas, New York, Louisiana, Illinois, Pennsylvania, Ohio, North Carolina, and Missouri.


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ASHA Corporate Partners