Hematology Services Identified as Potential Issues in National Rollout of RAC Program

2009-10-08

Medicare providers across the country are beginning to prepare for the national roll-out of the permanent Medicare Recovery Audit Contractor (RAC) program. Initially established as a demonstration project, RACs identify improper Medicare payments through a claims audit process - both overpayments and underpayments. The demonstration project identified approximately $900 million in overpayments and $38 million in underpayments. RACs are paid on a contingency-fee basis, receiving a percentage of the improper overpayments and underpayments they collect from providers. The Tax Relief and Health Care Act of 2006 made the RAC program permanent and authorized the Centers for Medicare and Medicaid Services (CMS) to expand the program to all 50 states and Puerto Rico by 2010. While the RAC program is still in the implementation stage and is not fully operational, information on how it will function is slowly being released.

RAC Program Approved Hematology Issues
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CMS has hired four contractors for the permanent RAC program, each responsible for a separate geographic area: Diversified Collection Services, CGI, Connolly Consulting, and Health Data Insights. While anyone who files a claim with Medicare can be audited by a RAC, the RACs will identify the issues they wish to pursue. However, these issues must be approved by CMS and posted on the RAC's Web site before they may proceed with a widespread review. All four RACs have posted their first set of approved issues. These issues will be updated periodically. There are a number of hematology-related issues included in this first set.

CMS has established a look-back period for audits beginning October 1, 2007. Additionally, CMS has placed a limit on the number of records a RAC can request during an audit. For FY 2009 the limits on physician claims are as follows:

  • Solo practitioner – 10 medical records per 45 days
  • Partnership (2-5 individuals) – 20 medical records per 45 days
  • Group (6-15 individuals) – 30 medical records per 45 days
  • Large group (+16 individuals) – 50 medical records per 45 days

Appeal rights as a Medicare provider still apply during a RAC audit. An appeal to a RAC decision is similar to any other appeal to Medicare. The Medicare appeals process includes five levels: (1) appeal to a carrier/MAC (2) appeal to qualified Independent Contractor (3) appeal to Administrative Law Judge (4) appeal to Medicare Appeals Council; and (5) appeal to Federal District Court. 

More information on the RAC program and how your practice can prepare is available online:

CMS RAC Web Site 

RAC Contractor Contact Information:

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