A letter arrives from the Supplemental Medical Review Contractor naming a specific billing code, diagnosis category, or service type your practice bills to Medicare. The notice is not a routine documentation request from your Medicare Administrative Contractor. It is a project-based review ordered directly by CMS, and it typically arrives with a 45 day deadline to submit medical records for a defined sample of claims. A compliance officer who treats the notice as boilerplate risks claim denials, recoupment, and, in some cases, a statistical extrapolation that multiplies the exposure across every claim the practice submitted during the review period.
What Is the SMRC Program
The SMRC is a single national contractor, currently Noridian Healthcare Solutions, retained by CMS to perform nationwide medical review of Medicare Part A and Part B claims, Medicaid claims, and durable medical equipment, prosthetics, orthotics, and supplies claims. Its role is distinct from the other contractors a compliance officer is more likely to encounter. The Medicare Administrative Contractor processes claims and performs routine medical review within its own jurisdiction. The Recovery Audit Contractor (RAC) identifies improper payments in claims already paid, working on a contingent fee basis. The Unified Program Integrity Contractor investigates suspected fraud. The SMRC instead carries out specific, CMS-assigned projects, frequently on topics already flagged by other review activity, and its reviews can occur before or after payment. For an overview of how these contractors fit together, see The Medicare Audit Process: Contractors, Stages, and Deadlines.
How CMS Selects SMRC Project Reviews
CMS, not the SMRC, decides what gets reviewed. The agency identifies vulnerabilities through its own data analysis, error rate findings from the CERT program, referrals from medical societies and professional associations, and reports from federal oversight bodies such as the HHS Office of Inspector General and the Government Accountability Office. Once CMS defines a review topic and timeframe, it issues a formal project assignment to the SMRC, which then selects a sample of claims within that topic from a given provider, or a group of providers, for review. Because projects are built around pattern-level billing signals rather than individual complaints, a practice's inclusion in an SMRC project does not by itself indicate suspected fraud. It does mean CMS has already identified a data pattern worth investigating, and the practice's response will shape what happens next.
Responding to an SMRC ADR
The review begins with an Additional Documentation Request, or ADR, identifying the claims selected and the records needed to support them. Providers generally have 45 days from the date of the request to submit the documentation. Missing that deadline typically results in an automatic denial of the claims at issue, not because the underlying service was undocumented, but because no record was submitted for review. For guidance on assembling a complete and timely submission, see Responding to a Medicare Additional Documentation Request (ADR). After the SMRC completes its review, it issues a Final Review Results letter explaining any denials. If the sample denial rate is high enough, CMS may direct the SMRC to extrapolate the error rate across the full universe of claims within that billing pattern, converting a review of a small sample into an overpayment demand covering a far larger population. Repeated adverse findings can also lead CMS to place a provider on prepayment review for the flagged billing pattern, a status discussed in Medicare Prepayment Review: Getting Off the Payment Hold. A provider who disagrees with the results retains full appeal rights, including redetermination, reconsideration, and an administrative law judge hearing, each governed by its own filing deadline.
A single SMRC project sample can, through extrapolation, turn a handful of denied claims into an overpayment demand covering years of billing on the same code.
Why Early Legal Counsel Is Critical
It is critical that physicians, pharmacies, and other providers promptly retain experienced healthcare defense counsel upon receiving an SMRC project notice. Early legal intervention can protect the practice's rights, ensure complete and timely responses to the ADR, avoid inadvertent admissions during any discussion and education session, preserve defenses against extrapolation, and allow counsel to communicate with the contractor on the practice's behalf. Delaying legal representation can significantly affect outcomes and expose the practice to unnecessary financial risk.
How Health Law Alliance Can Help
Health Law Alliance represents providers facing SMRC project reviews, from the initial ADR through appeal. If your practice has received an SMRC notice, contact us for a free, confidential consultation.
