Recovery Audit Contractor (RAC) Program Information
The Recovery Audit Contractor (RAC) program was developed as a demonstration project to identify improper Medicare payments that were not detected through existing error detection and prevention program efforts. Section 306 of the Medicare Modernization Act of 2003 directs CMS to use RACs to identify and recoup Medicare overpayments and underpayments.
If you would like to learn more about the RAC program, please visit the CMS Web site.
Summary of information related to RAC audits - March 2009
- What exactly is the RAC process?
The RAC Review Process:
- RACs review claims on a post-payment basis.
- RACs use the same Medicare policies as Carriers, FIs and MACs: NCDs, LCDs, and CMS Manuals.
- Two types of review:
- Automated (no medical record needed)- certainty that overpayment exists based on data review
- Complex (medical record required)- high probability (but not certainty) that the service is not covered
- RACs will not be able to review claims paid prior to October 1, 2007.
- RACs will be able to look back three years from the day the claim was paid.
- RACs are required to employ a staff consisting of nurses, therapists, certified coders, and physician CMD.
Steps in the Process:
- Initial Communication from RAC/ RAC issues demand letter
- Receiving RAC Requests
- Responding to RAC Requests /RAC offers an opportunity for the provider to discuss the improper payment determination with the RAC.
- Notification of Outcome
- Appeal Processes
- What contracts will they apply to the RAC?
- Anyone who bills fee-for-service Medicare is subject to claim review by the RACs.
- RACs are not intended to replace other review efforts by Fiscal Intermediaries, Part B and DME Carriers, Program Safeguard Contractors (PSC), Benefit Integrity Support Centers (BISC) Quality Improvement Organizations (QIO) or the Office of Inspector General (OIG)
- Selection of Claims for Review
- Must “target” claims through data analysis
- Cannot randomly select claims
- Cannot just focus on high payment claims
- National Areas of Focus and Type of Review:
- Inpatient
- Debridement (complex)
- Respiratory Failure (complex)
- Medical back pain (complex)
- Transfusion codes (automated)
- Speech therapy (automated)
- Neulasta (complex)
- Internal Data Mining
- High Risk DRGs
- High Volume DRGs
- High Volume OP services
- How can ROs interact with the RAC process?
- Know where previous improper payments have been found
- Look to see what improper payments were found by the RACs.
- Look to see what improper payments have been found in OIC and CERT reports.
- Know if you are submitting claims with improper payments
- Conduct an internal assessment to identify if you are in compliance with Medicare rules
- Identify corrective actions that need to take place for compliance
- Appeal when necessary
- Learn from past experiences
- Prepare to respond to RAC medical record requests
- Tell your RAC the precise address and contact person they should use when sending Medical Record Request Letters
- When necessary, check on the status of your medical record (Did the RAC receive it?
- Appeal when necessary
- The appeals process for the RAC denials is the same as the appeal process for Carrier/FI/MAC denials
- Do not confuse the “RAC Discussion Period” with the Appeals Process
- If you disagree with the RAC determination…
Do not stop with the sending a discussion letter
File an appeal before the 120th day after the Demand Letter
- Here are some things we have learned from this process
- Keep track of denied claims
- Look for patterns
- Determine what corrective actions you need to take to avoid improper payments
Resources
