2009-11-04
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, the RAC program is scheduled to become a permanent and national program in 2010. Through a claims audit process, RACs identify improper Medicare payments - both overpayments and underpayments. RACs are paid on a contingency fee basis, receiving a percentage of both the overpayments and underpayments they collect from and for providers. The original demonstration project identified approximately $900 million in overpayments and $38 million in underpayments. 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.
The following is information from Medicare to help you understand what you should know about the CMS RAC program.
What You Should Know About the CMS RAC Program:
What is the RAC program?
Through a claims audit process, RACs identify improper Medicare payments to providers - both overpayments and underpayments.
Who is impacted by the RAC program?
If you are a Medicare fee-for-service provider, your claims will be subject to review by the RACs.
How does the RAC program work?
RACs review claims on a post payment basis using the same Medicare policies as carriers, fiscal intermediaries and MACs. For the permanent RAC program, CMS has hired four contractors each responsible for a separate geographic area: Diversified Collection Services, CGI, Connolly Consulting, and Health Data Insights. While potentially anyone who files a claim with Medicare can be audited by a RAC, the RACs will identify specific issues they wish to pursue. These issues must be approved by CMS and posted on the RAC's website 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.
RACs will conduct two types of reviews: automated (no medical record needed) and complex (medical record required). Finally RACs are required to employ staff consisting of nurses, therapists, certified coders and a physician medical director. If an improper payment is identified a demand letter will be issued by the RAC. The RAC will offer an opportunity for the provider to discuss the improper payments determination with the RAC that is outside of the normal appeals process.
What rights do providers have under the RAC program?
As a result of feedback received from the demonstration project, CMS has established some limitations on the audits conducted by the RACs. RACs are only authorized to look-back at claims eginning October 1, 2007. Another right that providers have is that 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
New limits will be established for FY 2010. It is important to remember that your 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.
What can you do to prepare for the national rollout of the RAC program?
CMS has developed a number of recommendations for providers to assist them in preparing for the national RAC program.
- Look to see what improper payments were found by the RACs during the demonstration project.
- Look to see what improper payments have been found by the Office of the Inspector General (OIG) and the Comprehensive Error Rate Testing (CERT) program.
- Conduct an internal assessment to identify if you are in compliance with Medicare rules.
- Identify corrective actions to implement for compliance.
- Tell your RAC the precise address and contact person they should use when sending additional documentation request letters.
- Learn from your past experiences by keeping track of your denied claims and looking for patterns with your denied claims.
How can you learn more about the RAC program and how your practice can prepare?
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