Close X
Attorney Spotlight

How did an interest in healthcare policy lead Robert Platt to a career in the law? Find out more>


Close X


Search our Experience

Experience Spotlight

Envision to Sell to KKR for $9.9 Billion

We represented Envision Healthcare Corporation (NYSE: EVHC) in its definitive agreement to sell to KKR in an all-cash transaction for $9.9 billion, including debt. KKR will pay $46 per Envision share in cash to buy the company, marking a 32 percent premium to the company's volume-weighted average share price from November 1, when Envision announced it was considering its options. The transaction is expected to close the fourth quarter of 2018. Read more

Envision Healthcare

Close X

Thought Leadership

Enter your search terms in the relevant box(es) below to search for specific Thought Leadership.
To see a recent listing of Thought Leadership, click the blue Search button below.

Thought Leadership Spotlight

Six Things to Know Before Buying a Physician Practice spotlight

Dermatology, ophthalmology, radiology, urology…the list goes on. Yet, in any physician practice management transaction, there are six key considerations that apply and, if not carefully managed, can derail a transaction. Download the 6 Things to Know Before Buying a Physician Practice to keep your physician practice management transactions on track.

Click here to download the guide.

Another Contractor on the CMS Block: The Supplemental Medical Review Contractor


September 30, 2013

Part A, Part B, and durable medical equipment ("DME") providers and suppliers should prepare for requests from the newest medical review auditor: the Supplemental Medical Review/Specialty Contractor ("SMRC"). Though the SMRC model is still developing, StrategicHealthSolutions, LLC ("Strategic") recently embarked on its role as SMRC and now has reviews underway.


The SMRC audits Medicare claims submitted by Part A, Part B, and DME providers and suppliers to identify improper payments. This role is fulfilled by a private company that contracts with the Centers for Medicare and Medicaid Services ("CMS"). In 2012, Strategic was awarded a five-year contract to perform these audits. Entities falling within the ambit of SMRC review will be evaluated if CMS targets their service/provider specialty and possibly geographic region. CMS selects subjects to audit based on its own data and the Comprehensive Error Rate Testing ("CERT") program, which estimates improper payment rates by category (including service and provider type). CMS also considers feedback from professional organizations and federal agencies like HHS-OIG. The purpose of SMRC evaluation is to maximize government funds, as the government recoups excess payments identified by the SRMC. It is too early to know, however, whether the SRMC model will be efficient or whether it simply will duplicate existing efforts by other audit contractors.

Audit Process

An audit by the SMRC begins when the provider or supplier receives an Additional Document Request ("ADR") letter.1 The ADR letter identifies the service/provider specialty that triggered the review and requests records related to Medicare claims submitted under this category. In accordance with § 1833(e) of the Social Security Act, the provider must turn over the requested documents.2 If the provider fails to turn over requested documents, the SMRC must contact CMS, which then may recover previously awarded Medicare funds.

After submission, the SMRC then will review the documents to search for practices that, when performed improperly, may result in excess reimbursement. These practices include billing, payment, coverage, and coding. The SMRC review must comply with multiple CMS authorities, including its regulations, the Program Integrity Manual, and initiatives issued by the Provider Compliance Group/Division of Medical Review and Education.3 If the SMRC detects overpayment, the SMRC must contact CMS, after which the applicable Medicare Administrative Contractor ("MAC") will pursue a claim adjustment and/or overpayment collection action against the provider through the overpayment recovery process. To appeal the SMRC's finding, a provider must go through the normal MAC appeal process.

Effect on Providers and Suppliers

Providers and suppliers that may be subject to SMRC review should prepare for the possibility of an audit. CERT reports may indicate which service/provider specialties are likely to be audited.4 Strategic currently is performing medical review in the following areas: (Y1P1) Power Mobility Devices; (Y1P2) Evaluation and Management Services; (Y1P4) Hyperbaric Oxygen Therapy Services; (Y1P6) Inpatient Rehabilitation Facility Services; (Y1P7) HCPCS L7900: Male Vacuum Erection Devices; (Y1P8) Transforaminal Epidural Injections; (Y1P9) Medicare Part B Outpatient Therapy Services; (Y1P10) DME Part 2 Provider; (Y1P11) Evaluation and Management Services; (Y1P12) Non-Emergent MRI of the Lumbar Spine and (Y1P13) Non-Emergent Myocardial SPECT. With renewed emphasis on these areas, providers regularly should review their billing, payment, coverage, and coding procedures to ensure that these comply with regulatory and statutory obligations. Providers also should consider offering educational sessions to ensure that employees understand their responsibilities under the law, as well as potential penalties for noncompliance.

Moreover, providers should ensure that they are able to respond fully and promptly to an ADR. Implementing an SMRC response plan before receiving an SMRC request or appeal can be crucial. In addition, providers should ensure that their system enables them to access the documents requested by an ADR letter in a time- and cost-efficient manner.


Given the infancy of the SMRC, providers and suppliers should pay particular attention to the results of current SMRC audits and monitor the development of this new auditor. If you have any questions, please contact any of the attorneys in our Healthcare Practice Group or Healthcare Fraud Task Force.


1 A sample ADR letter is available here.
2 42 U.S.C. § 1395l(e) (2013) ("No payment shall be made to any provider . . . unless there has been furnished such information as may be necessary . . . to determine the amounts due [to] such provider . . . .").
3 This group is part of the Office of Financial Management within CMS.
4 See for more information on current projects.

Related Professionals

Related Services


Visiting, or interacting with, this website does not constitute an attorney-client relationship. Although we are always interested in hearing from visitors to our website, we cannot accept representation on a new matter from either existing clients or new clients until we know that we do not have a conflict of interest that would prevent us from doing so. Therefore, please do not send us any information about any new matter that may involve a potential legal representation until we have confirmed that a conflict of interest does not exist and we have expressly agreed in writing to the representation. Until there is such an agreement, we will not be deemed to have given you any advice, any information you send may not be deemed privileged and confidential, and we may be able to represent adverse parties.