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Reimbursement Methodologies Unit 6 Assignment 1

Fellow Classmates and Professor, The End Stage renal Disease (ESRD) Prospective Payment System has some very unique differences as opposed to the other PPS’s. These benefits are provided for individuals who have permanent kidney failure and require either dialysis or a kidney transplant. Coverage under this area is even further unique in that it applies to individuals of all ages. The other payment systems are based on a location where as this payment system is based on a particular condition. This system was put into place due to the amount Medicare was spending to fund treatments for individuals with ESRD. By creating a single payment system CMS is able to bundle payment for all services associated with renal dialysis treatment (Casto 2013). The resources and cost are impacted by several patient characteristics. The Patient-Level Adjustments are; patient age, body surface area, low body mass index, new patient (onset of dialysis), and specified comorbidities. The Facility-Level adjustments are wage index and low-

Medicare Fee for Service RAC Audits 2 Medicare Fee for Service RAC Audits A Recovery Audit Contractor (RAC) is an organization contracted to detect and correct improper payments in the Medicare Fee for Services (FFS) program. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 directed The Department of Health and Human Services to conduct a three year demonstration program using RACs, and subsequently The Tax Relief and Health Care Act of 2006 made the RAC program permanent and expanded it to all 50 states. RACs are authorized to investigate claims submitted by physicians, providers, facilities, and supplies. RACs conduct two main types of audits: automated and complex. An automated review occurs when a RAC makes a claim determination without a person reviewing the health record, this usually occurs through data mining (Casto 2013). A complex review can occur when a RAC makes a claim determination from a health record that have been reviewed by a person. Another type of review is called semi-automated. In this type of review it is similar to automated in that the claim is discovered trough data analysis and the provider has an opportunity to submit documentation to better help substantiate the claim (Casto 2013). The demonstration project began on March 28, 2005 and went through March 27, 2008. At the time the target states were California, Florida, and New York, because these states have a large Medicare population. The demonstration proved successful in returning overpayments to the Medicare Trust Fund and also identifying underpayments to provider (Casto 2013). The