Recovery Audit Contractor Program (RAC)

Beginning in January 2010, the Recovery Audit Contractors (RAC) program is coming to Virginia. The Office of Management and Budget estimates that Medicare makes improper payments of over $10 billion per year. CMS created the RAC program to recover these funds from providers. In a five-state pilot phase of the program, the RAC auditors recovered $992.7 million in overpayments; an average of nearly $200 million per state.

Prepare your organization by taking the following steps:

• Understand the areas the RACs will target. CMS and the Office of the Inspector General (OIG) have identified a number of areas where improper payment is likely; these are the codes and procedures that the RACs are most likely to focus on.
• Conduct an internal audit. This necessary component of a good compliance program is essential to determining your vulnerability for recovery of improper reimbursement. Use this information to develop a plan to improve your compliance with Medicare rules.
• Understand your rights in the audit process. The RACs are limited in the amount of information they may request; these limits apply to the claim date, number of records, and target areas.
• Know how the appeal process works. You have the right to appeal the RAC’s determination within 120 days after you receive a demand letter.

Resources

CMS Recovery Audit Contractor overview (cms.hhs.gov)
 
CMS RAC program FAQs (cms.hhs.gov)
 
Office of the Inspector General (OIG) Web site 

Connolly Consulting (Virginia’s RAC) RAC Web site 

Appealing a Medicare Recovery Audit Contractor (RAC) overpayment: Understanding the appeals process (PDF)

Recovery Audit Contractors (RACs) and Medicare presentation (PDF)

RAC medical record request limits (hhs.gov PDF)