Medicare’s Recovery Audit Program (RAC) is a program that will be utilized by the federal government to address waste, fraud, and abuse in the Medicare program. It is designed to identify overpayments and underpayments and was initially rolled out as a demonstration project. It is now permanent and national and is scheduled to begin in New Jersey in August of 2009.
The RAC identified and recouped over $900 million in overpayments between 2005 and 2008. It also identified and refunded over $38 million in underpayments. The program has been controversial in the provider community because the contractors are paid on a contingency fee basis.
Contracts for four recovery audit contractors (RAC) were awarded in October of 2009. New Jersey is in Region A, sometimes called the “blue” region. Regiona A's contractor is Diversified Collection Services (DCS). The RAC begins in New Jersey on August 1, 2009, but CMS is required to provide outreach and education before the program begins. CMS and MSNJ will co-host a telephone conference for MSNJ members on July 14at 11:30 a.m. as part of CMS’s outreach. Registration is required. Read
CMS’s presentation. Read
DCS’s presentation.
Improvements made to the RAC program include limitations on the number of medical record requests as well as a limit on the look- back period to October 1, 2007, then, once the program is implemented not more than a three year look-back. The RAC contractors must employ a physician medical director and a certified professional coder.
It should be noted that the RAC contractors have discretion in creating their own processes for auditing. However, CMS has oversight and reviews their processes for significant issues. AMA has a pending request to CMS to review the processes for consultations and evaluation and management codes.
Members are urged to prepare for the RAC program by conducting internal audits. For practical suggestion, read
“RACS are Coming--Prepare! Prepare! Prepare!" By
Kay Stanley, FACMPE.