Liles Parker PLLC
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Region B RAC CGI Announces that it will Begin Review of Eighteen Projects that Involve Medical Necessity

CGI Has Been Awarded a RAC Contract(August 25, 2010): CGI Technologies and Solutions, Inc., (CGI), has announced it will immediately begin reviews on 18 newly approved projects that involve the medical necessity of selected inpatient DRG payments.  A complete list of the “issues” currently being examined by CGI can be found on its website. Recovery Audit Contractors (RACs), such as CGI, contract with the Centers for Medicare & Medicaid Services (CMS) to perform post-payment reviews of Medicare claims to find overpayments and underpayments in return for a percentage (from 9 percent to 12.5 percent) of the amounts recovered. Put simply, they eat only what they kill.  CGI was awarded responsibility for handling Region B audits.  CGI’s contingency fee contract award dollar amount is 12.50% according to CMS.  Issues where CGI will be examining “medical necessity” requirements, include certain procedures related to:

  • Chest Pain
  • Other Circulatory System Diagnoses
  • Other Vascular Procedures
  • Syncope & Collapse
  • Red Blood Cell Disorders
  • Atherosclerosis
  • Heart Failure & Shock
  • Esophagitis, Gastroenteritis & Misc Digestive Disorders
  • Musculoskeletal Disorders
  • Chronic Obstructive Pulmonary Disease
  • Respiratory
  • Nutritional and Metabolic Disorders
  • Kidney & Urinary Tract Infections
  • GI Disorders
  • Percutaneous Cardiovascular Procedures
  • Renal Failure
  • Nervous System Disorders and
  • Cardiac Arrhythmia & Conduction Disorders.

 As CGI’s website discusses, when asked What utilization criteria will CGI be using to review for medical necessity?” in its FAQ section, CGI states, CGI will utilize the rules for National Coverage Determinations (NCD), Local Coverage Determinations (LCD), HCPCS, ICD-9 (ICD-10 when implemented and appropriate) and CCI that were in effect on the date of service. 

 A continuing concern of providers is that the RAC determinations of medical necessity will be  performed by personnel with little, if any, specific knowledge of the specific claims at issue.  Given the RAC business model, providers remain worried that audits will not reflect a fair and reasonable application of applicable coverage requirements. This is especially worrisome in light of the fact that approximately 41 percent of overpayments in the demonstration project were due to medical necessity determinations.

 Should you have questions regarding the RAC process, you may contact us for a complimentary consultation.  We can be reached at 1 (800) 475-1906.