Glossary · Compliance

Supplemental Medical Review Contractor (SMRC)

A Supplemental Medical Review Contractor (SMRC) is a CMS-contracted auditor that conducts nationwide post-payment and pre-payment medical reviews of Medicare Part A/B, Medicaid, and DMEPOS claims to identify improper payments and enforce coverage, coding, and billing requirements.

Verified May 8, 2026 · 4 sources ↓

Drawn from CMSNoridianHmenewsNoridiansmrc

Definition

Source · Editorial summary grounded in 4 cited references ↓

CMS awards the SMRC contract to a single national entity—currently Noridian Healthcare Solutions—to perform targeted medical record reviews across all claim types. Unlike Recovery Audit Contractors (RACs), which work on a contingency-fee basis, the SMRC operates under a direct contract with CMS and is driven by data signals: vulnerabilities surfaced through CMS analytics, Comprehensive Error Rate Testing (CERT) findings, input from professional organizations, and referrals from federal oversight agencies such as the OIG.

For orthopedic and musculoskeletal practices, SMRC scrutiny has historically landed on high-error categories such as orthopedic footwear and DMEPOS, but procedure-level reviews of surgical and evaluation-and-management claims are also within scope. When a review is opened, the SMRC sends an Additional Documentation Request (ADR) requiring supporting records—operative reports, clinical notes, imaging, and ordering documentation—within a defined response window. Failure to respond or submitting incomplete records typically results in a denial based on 'no documentation,' and that denial stands even if the underlying care was appropriate.

The SMRC can also execute special projects at CMS's direct request, making its audit universe broader and less predictable than that of a RAC or MAC. Practices that rely on historically low audit frequency as a proxy for low risk should note that SMRC projects are selected prospectively based on error-rate data, meaning a service category with a rising improper payment rate in CERT reports is already a candidate for the next review cycle before any individual provider receives an ADR.

Why it matters

An SMRC denial triggers a real repayment obligation: CMS recoups the overpayment from future remittances while the appeal is still pending, so cash flow is affected immediately, not after the process concludes. Orthopedic practices are directly exposed because DMEPOS categories tied to musculoskeletal care—orthopedic footwear, bracing, and DME ordered by orthopedic surgeons—have posted improper payment rates as high as 84.7% in CERT data, making them high-priority SMRC targets. A single project covering a two-year date-of-service window can generate dozens of ADRs simultaneously, overwhelming a practice's billing staff if no ADR-response protocol exists.

Common mistakes

Where people most often go wrong with this concept.

Source · Editorial brief grounded in cited references ↓

Treating SMRC ADRs as routine MAC correspondence and missing the response deadline, which converts a reviewable claim into an automatic 'no documentation' denial.
Submitting incomplete record packets—sending the operative report but omitting the pre-operative evaluation, imaging interpretation, or ordering physician's clinical notes that establish medical necessity.
Conflating the SMRC with the RAC and assuming the ADR volume or appeal pathway is identical; the SMRC uses its own redetermination and reconsideration chain, and timelines differ.
Failing to track SMRC current-project announcements on the noridiansmrc.com project page, leaving practices unaware that a service category they bill heavily is under active review.
Not flagging DMEPOS orders (orthotic footwear, knee braces, spinal orthoses) written by the orthopedic surgeon as higher SMRC-audit-risk items that require airtight face-to-face encounter documentation and a compliant written order before the item ships.

Frequently asked questions

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01How is the SMRC different from a RAC audit?

The RAC works on contingency—it earns a percentage of what it recovers—and operates by region. The SMRC is paid under a direct CMS contract, works nationwide across all claim types simultaneously, and can also conduct pre-payment reviews and special projects that RACs cannot. Both can result in repayment demands, but the triggering logic and scope differ.

02What should an orthopedic practice do when it receives an SMRC ADR?

Log the receipt date immediately, calendar the response deadline, and assemble the complete record packet—not just the claim-date note. Include the H&P, imaging reports, operative or procedure note, any prior authorization, and the ordering documentation for any DMEPOS involved. Submit through the channel specified in the ADR letter and retain proof of delivery.

03Which orthopedic services have been targeted by SMRC reviews?

Published SMRC projects have included orthopedic footwear and shoe inserts, lower-limb orthoses, and spinal bracing—all categories with documented CERT improper payment rates above 50%. Surgical and E/M claims can also be selected when CMS data identifies billing patterns inconsistent with peer norms.

04Can a practice appeal an SMRC denial?

Yes. The standard Medicare appeals ladder applies: redetermination by the MAC, reconsideration by a Qualified Independent Contractor (QIC), ALJ hearing, Medicare Appeals Council review, and federal district court. CMS recoupment typically begins after the second-level decision, so engaging the appeals process quickly is important for cash flow.

05How can an orthopedic practice monitor upcoming SMRC review targets?

Noridian publishes its current and completed project list at noridiansmrc.com. Reviewing this list quarterly and cross-referencing it against the practice's top-volume billing categories is the most direct way to anticipate exposure before an ADR arrives.

Sources & references

Editorial content was developed using the following public sources. Last verified May 8, 2026.

Mira AI Scribe

Mira flags encounters that fall into active or historically high-risk SMRC review categories—currently including orthopedic footwear, DMEPOS orders, and musculoskeletal DME—and prompts the documenting clinician to complete the specific elements that support medical necessity for those services. For DMEPOS-adjacent documentation, Mira verifies that the clinical note contains: (1) a diagnosis with ICD-10 specificity sufficient to meet payer coverage criteria, (2) a description of the functional limitation driving the order, (3) confirmation that conservative measures were attempted or contraindicated where required, and (4) the treating provider's identity and credentials. When an encounter generates a DMEPOS order, Mira produces a structured summary section that can be attached directly to the written order, reducing the gap between what the physician documented and what the DME supplier submits with the claim. This pre-claim documentation integrity step is the primary lever for reducing 'no documentation' and 'insufficient documentation' denials in an SMRC review.

See Mira's approach

A Medicare Administrative Contractor (MAC) is a private insurance company under contract with CMS to process and pay Medicare Part A and Part B fee-for-service claims within an assigned geographic jurisdiction. MACs are the primary point of contact for providers on coverage policies, claims adjudication, and local coverage determinations.

Medical necessity Compliance

Medical necessity is the standard requiring that a service or item be reasonable and appropriate for diagnosing or treating a patient's condition according to accepted clinical practice. Payers—including Medicare—use this standard to determine whether a claim will be covered and paid.

Post-payment review Compliance

A post-payment review is a payer's retrospective examination of already-paid claims to verify that billed services were medically necessary, properly documented, and correctly coded—and to recover funds when they were not.

Pre-payment review Compliance

Pre-payment review is a payer-initiated process that requires a provider to submit supporting medical records alongside each affected claim before the payer will adjudicate or release payment. It is typically triggered by a history of billing errors, documentation deficiencies, or statistical outliers compared with peer providers.