Medicare RAC Program Audit
Medicare Recovery Audit Contractors (RAC)
Congress created RAC to help identify improper Medicare payments.
RAC auditors are private contractors paid a commission by the government to:
- Identify overpayments or under payments
- Recoup overpayments or return underpayments
Unfortunately, bounty-hunter-like incentives cause physician practices undue hardship, expense and time away from patients. The AMA strives to make sure that CMS implements the RAC program in an equitable manner.
AMA-Advocated RAC Improvements
- RACs are required to maintain an accuracy rate of at least 95%. Failure to maintain this accuracy rate will result in a progressive reduction of the RACs ability to request medical records from physicians.
- If claims are overturned on appeal, RACs must pay physicians interest calculated from the date of recoupment.
- CMS shortened the timeframe a RAC can go back and recover monies from 4 years to 3.
- RACs must have certified coders.
- RACs can request up to 10 medical records per single practitioner within a 45-day period, but current advocacy seeks to lower the amount to no more than 3 within a 45-day period.
- CMS will place a lower limit on the number of medical records a RAC may request of a physician with a low denial rate. CMS will also allow RACs to request more medical records from physicians with higher denial rates. The medical record limits will be adjusted as a physician’s denial rate decreases. Therefore, a physician who complies with Medicare rules will have fewer RAC document requirements.
- RACs are required to have a physician contractor medical director and are encouraged to have a panel of specialists available for consultation.
- RACs must maintain a web presence where physicians can look up the status of audits involving medical record reviews.
- RACs must reimburse physicians for the cost of printing and mailing medical records.
- Topics reviewed by each RAC (referred to as vulnerabilities) must be approved by CMS and posted on their respective websites.
- Proposed review topics are posted on the CMS website for 30 days prior to approval so that physician groups can weigh-in.
- RACs will not receive contingency fees until after the second level of appeal and contingency fees must be paid back if the RACs ultimately lose on appeal.
- An independent external validation process is now mandatory to help ensure audit areas are appropriate.
- RACs must offer physicians the chance to discuss improper payment identification with the contractor medical director.
Medicare RAC Program Audit