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Peer Review Organizations (PROs) Fraud

CMS enters into contracts with PRO’s to review services furnished by physicians, other health care practitioners, and institutional and non-institutional providers of health care services, including health maintenance organizations and capitated medical plans, as specified in their contract with CMS. The reviews are generally to determine whether those services are reasonable, medically necessary, furnished in the appropriate setting, and of a quality that meets professionally recognized standards of health care They are paid by submitting monthly cost reports called “vouchers.” The costs are based on a budget, and the budget is based on projected costs which may increase or decrease based on expenses, subject to a cap. Several PRO’s have been the subject of fraud investigations and qui tam lawsuits, all arising from fabrications in their cost reports.

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