Patient status reviews by the Recovery Auditors have been delayed again, this time until Oct. 1, 2015, by an act of Congress.

When Congress passed legislation that eliminated the Medicare sustainable growth rate payment for physicians, it also postponed full implementation of the Centers for Medicare & Medicaid Services’ controversial “two-midnight” rule and extended the Probe and Educate audit program through Sept. 30, 2015, according to Kurt Hopfensperger, MD, JD, senior medical director of audit, compliance, and education at Executive Health Resources, a Newtown Square, PA, healthcare consulting firm.

CMS had already changed the proposed start of the Recovery Auditors’ inpatient status review audits until April 30 in anticipation that Congress would include the issue in the sustainable growth rate bill as it did last year. As part of a 2014 bill addressing the sustainable growth rate, Congress delayed enforcement of the two-midnight policy through March 31, 2015, and prohibited the Recovery Auditors from conducting post-payment reviews of claims that fall under the two-midnight rule.

CMS began the Probe and Educate initiative — pre-payment audits by the Medicare Administrative Contractors (MAC) — to help hospitals understand the two-midnight rule implemented in the 2014 Inpatient Prospective Payment System (IPPS) final rule. At the same time, CMS prohibited the Recovery Auditors (RAs) from conducting inpatient status review audits with dates of admission through the Probe and Educate period.

The bill passed by Congress doesn’t include specifics about the Probe and Educate initiative, Hopfensperger points out. However, CMS limited the MACs to three rounds of audits on each hospital. “Unless CMS directs the MACs to perform a fourth round of audits, hospitals can expect the MACs to stop after three Probe and Educate audits,” he says.

The 2014 Congressional bill also directed CMS to develop a policy to address payment for the short-stay patients who receive inpatient services but do not need to be in the hospital over two midnights. CMS has asked for feedback on the issue, but has not announced a policy.

In the 2016 IPPS proposed rule, CMS stated that it is considering the feedback it has received and expects to have further discussions on the subject. (For more on the IPPS, see the July issue of Hospital Case Management.)

In early 2014, CMS announced plans to revamp the Recovery Audit program in response to industry feedback and issue new contracts with audits starting under the new program on January 1, 2015. The agency made changes to the program and started to rebid the Recovery Audit contracts. However, the process has been held up by a court order that directs CMS to rewrite the business portion of the new contracts to be in line with customary business practices, Hopfensperger says. Meanwhile, the new Recovery Audit program is on hold.

“It’s unlikely that CMS will complete this and have the new Recovery Auditors in place by Oct. 1. The existing RAs will be conducting the patient status reviews under the existing rules if the reviews resume on Oct. 1,” he adds.