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Medicare RAC Program Audit

By December 3, 2017Healthcare Law

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

Ansari Law Firm

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