What is a SMRC?

A SMRC is a Supplemental Medical Review Contractor. CMS contracts with SMRCs to conduct medical reviews for Medicare Part A, Medicare Part B, and DME providers. SMRCs are contracted through the Center for Program Integrity/Provider Compliance Group Division of Medical Review and Education (DMRE).

By contracting with Supplemental Medical Review Contractors (SMRCs), CMS helps to lower the Medicare payment rates. In addition, CMS seeks to increase the efficiencies of the medical review function.

What areas does a SMRC focus on?

All services and specialties are subject to review. The focus topics at any point in time are assigned to a SMRC via a formal notification.  CMS generates areas of focus from different sources such as: anomalies identified based upon analysis of internal CMS data, federal agencies (e.g., OIG), CERT program, PEPPER reports. Projects and focus areas are typically for a specified time frame.

How does a SMRC conduct its review?

A hospice agency SMRC review begins with an Additional Documentation Request (ADR).  The SMRC sends the hospice agency a request for addition documentation for the claims that have been targeted for additional medical review.

The letter from the SMRC specifies which topic area/SMRC project the ADR is linked to and how the claims in the ADR were selected for medical review. The hospice must submit the additional documentation by a specific date, as specified in the letter. A hospice agency can usually request an extension to respond. However, failing to respond is viewed as agreeing with negative findings of the audit and CMS will deem that an overpayment was made and begin recouping funds immediately after the medical records due date specified in the ADR.

Responding to an ADR

It is important to prepare an organized response to the SMRC ADR. Several elements contribute to a good response to the audit:

• Timely response: Timeliness is a critical element. The ADR specifies the due date for response – typically 45 days from the date of the letter. Late response is equivalent to agreeing to negative findings of the audit.  Failure to respond timely or to respond at all results in overpayment being deemed and trigger of recoupment.
• Dedicated resources to respond: It is recommended to have specific individuals who are responsible for responding to audits. These would include an oversight team as well as individuals from departments such as compliance and billing. Good internal communication will ensure there is no miscommunication and that all necessary documentation is gathered.
• No missing documentation: Every item that is requested in the ADR must be provided. Missing or incomplete documentation is a top reason for medical review denial and resulting overpayment
• Organization of submitted documents: Documentation should be organized in chronological order so that the submitted documentation presents and organized medical story supporting the claims and billing that was submitted to CMS for payment. That is, the documents submitted should “tell the auditor a story.” They should guide the auditor through the patient’s plan of care and through the patient’s course of therapy.
• Number pages: Number each page that is submitted. This will identify if the auditor is overlooked or is missing any submitted documentation and will facilitate responding to any questions (as questions and responses can refer to the numbered pages). Similarly, it facilitates the calls with the auditors; discussions can refer to numbered pages.
• Include the ADR letter
• Provide a point of contact
• Retain a copy of your submission: Retain a complete copy of everything submitted in response to the ADR.
• Submit the response: Submit your response to the ADR, either by mail, fax, or electronically. Retain proof of submission, including proof of the date (and time, if possible) of submission.
  • Contractor portal: this is the preferable method of submission. It is the most efficient method of submitting and it is the fastest way for the contractor to receive the submission
  • Fax: Retain a copy of the fax confirmation page, indicating when the fax was sent, confirmation of successful transmission, and number of pages sent
  • Mail: Confirm the correct mailing address. Retain proof of mailing.

What happens after the SMRC completes the review?

After the SMRC completes its review of the medical claims, it issues a Review Results Letter to the hospice agency, outlining the findings of the review for each of the claims included in the ADR. The letter also details options available to the hospice should it agree or disagree with SMRC’s findings.

What if the hospice agency agrees with the SMRCs findings?

If the hospice agency agrees with the SMRC’s findings and a finding of overpayment was identified, the hospice follows the standard overpayment process.

What if the hospice agency disagrees with the SMRCs findings?

If the hospice agency does not agree with the SMRC’s findings, it can request a Discussion and Education (D&E) session with the SMRC. During the D&E, the hospice communicates directly with the auditor regarding its medical findings.   The hospice may also submit any additional missing documentation. This period also serves as an opportunity for education for the hospice agency about coding and payment policies, to avoid future denials.  A D&E must usually be requested within 14 days of the Review Results Letter date. The D&E is then scheduled within 14 days of when it is requested. If, during this session, the hospice agency indicates that it has additional documentation to provide to the SMRC to support the medical review of the claims under review, it has 14 days from the date of the D&E session to submit the documentation. Once the SMRC receives the additional documentation, it will conduct a review within 14 days and then generate a revised final results letter – typically within seven days.

A hospice agency may also decline a D&E session but submit additional missing documentation. In this case, within 14 days of the date of the final results letter the hospice agency must convey its intent to submit additional documentation. The documentation must be received by the SMRC within 30 days from the date of the Review Results Letter. Documentation received later will not be considered.

What is a re-review?

If the hospice agency provides additional documentation in response to the first Review Results Letter, the SMRC will review the additional information provided (re-review) and send a new final review results letter.

How does the SMRC report overpayments?

If the SMRC completes its medical review and finds that improper payments were made to the hospice agency, it will notify the MAC. (Learn more about a MAC here.)  The MAC will also be notified if the hospice agency failed to comply with the request to submit documentation.  However, the SMRC will wait at least 60 days from the final review letter and 30 days from the re-review before it provides the MAC with the details of the claims that are subject to recoupment. The SMRC compiles the list of claims that are subject to adjustment and sends the details to the MAC. The MAC sends an overpayment demand letter to the hospice agency. Demand letters from the MAC may have appeal rights.

Demand letters and appeal rights

Once an audit is finalized, hospice agencies should look out for the demand letter from the MAC. Questions about overpayments should be directed to the MAC, not to the SMRC. A hospice agency can only appeal once it receives the demand letter.

The agency has 120 days from the MAC demand letter date to file the first level of appeal for redetermination of the SMRC findings. Once the hospice agency files its appeal, collection actions will stop. The MAC will respond to the redetermination within 60 days from receipt of the appeal. The MAC’s response to the appeal for redetermination will include options for additional appeal rights.  There are typically options for multiple levels of appeal as well as a final option to elevate the appeal of the claims to an administrative law judge (ALJ). Response time for an appeal to an administrative law judge may be quite lengthy as there has historically been a significant backlog of requests that have been submitted to this level.

What else can help improve a hospice agency’s success in responding to audits?

Hospice agencies often engage outside support to respond to audits, including both legal experts that specialize in healthcare and in responding to audits as well as compliance experts that specialize in hospice, billing, and audit response. These experts can often serve as a highly efficient and effective sources of support and can increase the likelihood of a positive outcome including overturning auditors’ negative findings.

Where can you find more information

• CMS – What is a SMRC
• Husch Blackwell – Medicare audits and tips on Responding
• What are SMRC activities?
• Audits and potential payment suspension