SMRC: The Latest Development in Medicare Audits

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adrienneJLG3By Adrienne Dresevic, Esq. and Jessica L. Gustafson, Esq.

September 2013—As healthcare providers and suppliers are very much aware, the Centers for Medicare & Medicaid Services (CMS) has adopted and implemented numerous Medicare auditing initiatives, including Comprehensive Error Rate Testing (CERT) audits, Medicare Administrative Contractor (MAC) audits, recovery (formerly known as RAC) audits, and Zone Program Integrity Contractor (ZPIC) audits.  Each of these auditing bodies has a slightly different focus, and conducts reviews of claims to determine whether they resulted in improper payments.  Many in the healthcare provider and supplier community may feel that four Medicare auditing bodies are sufficient to protect CMS from making improper payments, and CMS recently indicated its intent to move toward a more streamlined medical review approach comprised of fewer medical review entities. Nonetheless, CMS recently rolled out yet another “supplemental” Medicare auditing program: Supplemental Medical Review Contractor (SMRC) audits.

CMS has contracted with StrategicHealthSolutions, LLC to perform or support existing medical review functions within the Medicare and Medicaid programs. On October 22, 2012, StrategicHealthSolutions, LLC announced a five year medical review contract with CMS, and SMRC audits recently began on Part A, Part B, and DME providers and suppliers nationwide.  SMRC audits are intended to focus on vulnerabilities identified by data analysis, CERT audits, and other sources (including professional organizations and federal oversight agencies).  Currently, StrategicHealthSolutions, LLC’s website lists the following as areas of medical review:

  • Power Mobility Devices
  • E/M services (focused on codes 99214 and 99215)
  • Hyperbaric Oxygen Therapy services
  • Inpatient Rehabilitation Facility (“IRF”) services
  • Male Vacuum Erection Devices
  • Transforaminal Epidural Injections

Although the issues presently under review are not directly relevant to many radiology providers, it is important to keep in mind that given that the OIG and CMS medical review contractors routinely identify Part B imaging services and diagnostic radiology services as those giving rise to potential program vulnerabilities, radiology providers and suppliers are well-advised to closely monitor the SMRC’s website for areas of future potential medical review activity.

The addition of one more auditing body certainly adds to the administrative burden which health care providers and suppliers already face.  The SMRC’s website provides detailed instructions regarding the methods by which it will accept requested documentation and instructions for submission.  The SMRC has advised that it is “not authorized” to compensate providers and suppliers for their costs associated with complying with a request for medical records.  It should also be noted that there is no indication that the SMRC intends to limit its requests for records taking into account the additional documentation limits in place for recovery audits specifically.

Radiology providers and suppliers must maintain a continued focus on compliance and ensure that services provided are medically necessary and appropriately documented pursuant to Medicare guidelines.  The SMRC audit program is the latest addition to an already robust auditing environment.  In addition to monitoring the yearly OIG Work Plan, CMS guidance materials, and the recovery auditors’ websites, radiology providers should add the SMRC website to their list of resources advising them of the areas of CMS medical review focus and take steps to monitor these areas for compliance.

Adrienne Dresevic, Esq. graduated Magna Cum Laude from Wayne State University Law School. Practicing healthcare law, she concentrates in Stark and fraud/abuse, representing various diagnostic imaging providers, eg, IDTFs, mobile leasing entities, and radiology and multi-specialty group practices.

Jessica L. Gustafson, Esq. is a founding shareholder with the health care law firm of The Health Law Partners, P.C.  Ms. Gustafson co-leads the firm’s Recovery Audit and Medicare appeals practice group and specializes in a number of areas, including: RAC, Medicare, Medicaid and other payor audit appeals, healthcare regulatory matters, compliance matters, reimbursement and contracting matters.  

The authors are members of The Health Law Partners, P.C. and may be reached at (248) 996-8510 or (212) 734-0128, or at

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