NGS J13 - Remittance Advice

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How to Interpret the Remittance Advice for Adjustments Subject
to MMA Section 935—Recovery Audit Contractor or Other
Postpay Review
This article will help you identify when a Section 935 recoupment is occurring. The Medicare Prescription Drug, Improvement,
and Modernization (MMA) Act of 2003, Section 935, Limitation on Recoupment, affects recovery audit contractor (RAC) and
other postpay review adjustments. It is important that you recognize these types of adjustments on your remittance advice
and act accordingly when or if they occurs.
The following sample graphics are from a Part A standard paper remittance advice (SPR) illustrate a RAC adjustment. Please
Note: The following sample graphics are for illustration purposes only and may not represent a single provider or claim.
An indicator that a RAC adjustment (or other adjustment initiated by the Centers for Medicare & Medicaid Services [CMS] e.g.,
Comprehensive Error Rate Testing [CERT]) has been completed is by the appearance of an “H” in the 3 rd position of the type
of bill on the All Claims Screen. (Refer to boxed area below on the All Claims Page sample graphic).
Remark code N469 identified the adjustment as subject to Section 935. Effective in July 2010, RAC adjustments will be
identified by remark code N432.
Important Point: It appears the money is being taken back; however, it is not. The Adjustment to Balance (refer to boxed
area below) is actually being added back into the Net Provider Payment, even though it shows as a negative amount. It will
be the difference in reimbursement resulting from the adjustment. In our remittance example:
$ 3280.69 (original reimbursement)
- 3041.39 (adjusted reimbursement
239.30
A demand letter dated one day prior to the remittance date will be issued to the provider which will identify the claims as
being adjusted and provide information about filing an appeal request.
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If the provider has not filed a valid appeal request, the amount owed will be recouped on a remittance advice 41 days after
the claim finalized (i.e., date of the demand letter). Providers will be able to identify that amount by reviewing the amount
listed in the 935 withholding field as a positive. Note that the amount withheld will include interest if the recoupment occurs
more than 30 days after the date of the demand letter.
Posted 06/17/2010
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