van Halem Audit Updates – Where We Stand

Posted on in Billing/Reimbursement, HME Government Issues

By: Wayne van Halem, president, Van Halem Group

It is an interesting time in the world of Medicare audits and contractors responsible for payment oversight. 

The Affordable Care Act has expanded CMS’ authority to revoke the billing privileges of providers or suppliers who show a pattern of improper billing. What does “improper billing” mean? When you look at the high error rates identified by these seemingly endless array of contractors who also have a lot of skin in the game, it’s a scary thought to ponder. This article will summarize where we stand and provide some insight on what is to come.


Despite a hearing in 2013 and subsequent letter in 2014 regarding concern of the Recovery Audit Contractor Program by the Senate Finance Committee, CMS seems to be pushing forward with an expansion of this program, albeit slowly. A significant reduction in activity occurred in 2015, mainly due to contracting issues and disputes, which still remain unresolved. In the most recent updates, CMS confirmed it is essentially starting over with the contracting process, but all RACs were able to continue audit activities through July 31, 2016. There have been a number of enhancements[1] identified in the expanded program, but it looks like we’re back to square one. 


These contractors are responsible for identifying and preventing fraud, waste and abuse. We’ve seen an increase in the number of large, extrapolated overpayments and other aggressive actions – including payment suspensions – against providers and suppliers. In some instances, these actions are taken against entities for issues that, in the past, one would not have expected such actions. In June 2015, CMS released a pre-solicitation notice to interested parties that they would be releasing a Request for Proposal (RFP) for Unified Program Integrity Contractors. The notice indicated, “…the UPIC will combine and integrate existing CMS program integrity functions carried out by multiple contractors and contracts into a single contractor to improve its capacity to swiftly anticipate and adapt to the ever-changing and dynamic nature of those involved in health care fraud, waste and abuse across the Medicare and Medicaid program integrity continuum.”

Supplemental Medical Review Contractor (SMRC)

The SMRC is exactly how it sounds: another government contract awarded to a company, in this case Strategic Health Solutions, to supplement the work already being performed by current contractors.  Regular medical review functions are the responsibility of the administrative contractors and fall under the scope of work. While the goal of the program is to reduce the improper payment rates and increase efficiencies in the medical review program, it equates to more audits and more overpayments for providers and suppliers. 

The SMRC has a long list of completed projects across the continuum of health care services,[2] and current projects include various types of durable medical equipment.

More audit updates at VGM Heartland Conference

Learn about this and several other updates by attending “Audits: What can we expect” at Heartland Conference 2016 in Waterloo, Iowa. Register at

About Wayne van Halem

Wayne van Halem is president and founder of The van Halem Group, a division of VGM Group, Inc. Since 2006, The van Halem Group has helped providers navigate complex issues related to Medicare and Medicaid audits, appeals, enrollment and compliance. Wayne has built a career interpreting and understanding the nation’s preeminent health care entitlement program. Wayne’s experience and sound counsel, captured in lectures and publications, has uniquely positioned him as a resource to health care providers, Medicare contractors, legal counsel and federal agencies.