Get Ready for the RAC Attack
Medicare’s Recovery Audit Contractor (RAC) programs have been operational in all 50 states since Jan. 1, 2010. And beginning Jan. 1, 2012, all states must have RAC programs in place to identify improper payments for Medicaid services.
RAC audits initially focused on inpatient settings, where the return on investigative effort is higher, but the audits are now focusing on outpatient settings. All physician practices that submit claims to these federal programs will likely be reviewed at some point by a RAC. So it’s critical that your practice understand how the program works.
The purpose of the program
The RAC program is designed to identify and recover incorrect payments made for noncovered, duplicative and erroneously coded services. The audits are carried out by four private contractors assigned by region. (See the sidebar “The 4 RACs.”)
These contractors use software to analyze claims based on each practice’s claims history. On that basis, the contractors may request access to internal documents such as medical records. Audits can reach back to claims paid as early as October 2007.
What happens if there’s been an overpayment
When a RAC audit determines that there’s been an overpayment, your practice will receive a letter demanding recoupment. The letter will explain:
- The coverage, coding or payment policy that was violated,
- The overpayment situation,
- Recommended corrective actions,
- Your right to submit a rebuttal statement before recoupment,
- Procedures for recouping overpayments,
- Your right to request an extended payment schedule, and
- Your right to appeal.
Interest begins accruing on the 31st day after the letter. If the practice files an appeal within 30 calendar days of receiving the letter, recoupment will be suspended. An appeal filed beyond 120 days after the letter won’t be accepted.
How the appeal process works
There are five potential levels of appeal, should a practice wish to pursue them: 1) redetermination by the RAC, 2) reconsideration by the RAC, 3) administrative law judge, 4) Medicare Appeals Council, and 5) U.S. District Court.
If the practice wins the appeal, neither the RAC nor CMS may appeal further. Note that the first level of non-RAC appeal is to administrative law judges, who may be more sympathetic than the RAC.
How to prepare
Even though CMS is going after intentional fraud and abuse violators, it must investigate even minor violations in order to catch the major ones. Because there’s a chance you could be audited and the time frame for appeal is tight, you must be prepared:
- Visit the RAC’s website for your region and learn about specific codes and practice issues on which the RAC is focusing.
- Review your billing and documentation practices for each area of RAC focus.
- Hire a certified professional coder to audit a sample of E&M services as well as non-E&M services for each physician.
- Review your practice compliance plan and make sure each step is operational. If you don’t have a plan, begin the process to create one now.
- Prepare a practice protocol for responding to all RAC inquiries, and designate a RAC response officer and staff who’ll be involved.
- Maintain a log to keep track of document requests, recoupment demands, appeal deadlines and final determinations.
- Consider conducting a mock RAC attack to see how your practice will respond. For example, can your practice assemble the requested documents within the allotted time? Can you prepare and file an appeal by the deadline?
In addition, watch the mail closely so you don’t miss any audit requests and subsequent appeal deadlines.
Final words of wisdom
If your practice receives an information or audit request, contact the source to determine the type of audit. Not all independent auditors are RACs or government-mandated. If it’s a RAC audit, contact your health care advisor and an attorney. They can help you sort out the situation and determine the best course of action. •
The 4 RACs
| Contractor | Region |
| Diversified Collection Services ( http://www.dcsrac.com ) |
A: Connecticut, Delaware, the District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont |
| CGI
|
B: Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio and Wisconsin |
| Connolly, Inc
.
|
C: Alabama, Arkansas, Colorado, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia, Puerto Rico and the U.S. Virgin Islands |
| HealthDataInsights ( http://racinfo.healthdatainsights.com ) | D: Alaska, Arizona, California, Hawaii, Idaho, Iowa, Kansas, Missouri, Montana, Nebraska, Nevada, North Dakota, Oregon, South Dakota, Utah, Washington, Wyoming, Guam, American Samoa and Northern Marianas |
This material is generic in nature. Before relying on the material in any important matter, users should note date of publication and carefully evaluate its accuracy, currency, completeness, and relevance for their purposes, and should obtain any appropriate professional advice relevant to their particular circumstances.
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