QIOs assuming inpatient recovery audit duties

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Medicare recovery audit contractors have started being phased out in favor of quality improvement organizations, according to a new published report.

The QIOs began handling inpatient status reviews that were previously done by auditors on October 1. RACs won't conduct any future inpatient reviews unless they receive a referral by the QIOs, according to Bloomberg BNA.

The transition was included as part of the Centers of Medicare & Medicaid Services' hospital outpatient payment rule proposed in July. RACs are barred from conducting inpatient reviews through the end of 2015, in order to allow hospitals to comply with the two-midnight rule.

RACs will continue to conduct reviews for outpatient therapy, as well as auditing Medicare claims from skilled nursing facilities, physicians and home health agencies. A recent report shows RACs identified and corrected $2.4 billion in provider overpayments in 2014.