Overview of Prepayment and Postpayment Claim Review

Prepayment Review: A reviewer makes a claim determination before claim payment has been made. Prepayment review always results in an 'initial determination.'

Postpayment Review: A reviewer makes a claim determination after the claim has been paid. Postpayment review results in either no change to the initial determination or a 'revised determination' indicating that an overpayment or underpayment has occurred.

Prepayment and postpayment review can be accomplished through either:

• Service Specific Review
• Provider Specific Review

Service Specific Review: A review that is performed when the same or similar problematic process is noted to be widespread and affecting a particular type of service. When data analysis confirms that an improper payment can be prevented through service specific complex review, the Medicare Administrative Contractor (MAC) and the Railroad Retirement Board Specialty Medicare Administrative Contractor (RRB SMAC) will install claim edits that target the specific service identified.

For initiation of service-specific review, providers are notified prior to the start of review by an article posted on the MAC/SMAC’s website. An Additional Documentation Request (ADR) will be sent to the provider requesting supporting documentation for the claims selected by the edit.

Upon the completion of the service specific review, the claim review findings are analyzed and the results are posted to the MAC/SMAC’s website.

Provider Specific Review: A review that is performed when data analysis indicates a potential error exists with a specific provider or providers that cannot be confirmed without requesting and reviewing documentation associated with the claim.

For initiation of provider specific review, the affected provider(s) are sent a notification letter. The letter will include an explanation of the type of claims that will be selected, i.e. particular CPT, HCPCS or HIPPS codes. An Additional Documentation Request (ADR) will be sent to the provider requesting supporting documentation for the claims selected by the edit.

Upon completion of the provider specific review, a results letter will be sent to provider with results of prepayment claims review. Provider-specific review results are not published on the website.

NOTE: In some cases, a service-specific review can lead to a provider-specific review based on the analysis of the service specific results. 

Reference: The Centers for Medicare & Medicaid Services (CMS) Internet Only Manual (IOM) Publication 100-08, Chapter 3 (PDF, 625 KB).