- General Information
- How the RACs Were Selected
- Recovery Audit Contractors
- RAC Approved Issues
- Medical Record Submission Requirements
- Additional Information
General Information
The Centers for Medicare & Medicaid Services (CMS) announced aggressive new steps to find and prevent waste, fraud and abuse in Medicare. CMS is working closer with beneficiaries and providers; consolidating its fraud detection efforts; strengthening its oversight of medical equipment suppliers and home health agencies; and launching the national Recovery Audit Contractor (RAC) program.
CMS is consolidating its efforts with new program integrity contractors that will look at billing trends and patterns across Medicare. They will focus on companies and individuals whose billings for Medicare services are higher than the majority of providers and suppliers in the community. CMS is also shifting its traditional approach to fighting fraud by working directly with beneficiaries by ensuring they received the durable medical equipment or home health services for which Medicare was billed and that the items or services were medically necessary.
Furthermore, CMS will be taking additional steps to fight fraud and abuse in home health agencies and suppliers of durable medical equipment, prosthetics and orthotics (DMEPOS). Those additional steps include:
- Conducting more stringent reviews of new DMEPOS suppliers’ applications including background checks to ensure that a principal, owner or managing owner has not been suspended by Medicare;
- Making unannounced site visits to double check that suppliers and home health agencies are actually in business;
- Implementing extensive pre- and post-payment review of claims submitted by suppliers, home health agencies and ordering or referring physicians;
- Validating claims submitted by physicians who order a high number of certain items or services by sending follow-up letters to these physicians;
- Verifying the relationship between physicians who order a large volume of DMEPOS equipment or supplies or home health visits and the beneficiaries for whom they ordered these services;
- Identifying and visiting high risk beneficiaries to ensure they are appropriately receiving the items and services for which Medicare is being billed.
The additional reviews, that will be focused on DMEPOS equipment and supplies with high expenditures and high growth rates, expect to identify items such as oxygen supplies and equipment, power mobility devices or power wheelchairs, and diabetic test strips.
How the RACs Were Selected
The new RACs were selected under a full and open competition and will begin to educate and inform providers later in October and November about the program. The RACs will be paid on a contingency fee basis on both the overpayments and underpayments they find. The selection of these new contractors was based on a best value determination that included a sound technical approach for the level and quality of claim analysis and detail to exceptional customer service, conflict of interest reviews and lowest contingency fee. The 3-year RAC demonstration program in California , Florida , New York , Massachusetts , South Carolina and Arizona collected over $900 million in overpayments and nearly $38 million in underpayments were returned to health care providers.
In Spring 2007, CMS began the process to procure 4 RAC contractors through a full and open competition. On March 16, 2007 CMS released a Request for Information (RFI) which contained a draft statement of work. On August 16, 2007 CMS released a pre-solicitation notice which contained a statement of work. On October 19, 2007, CMS released a Request for Proposal (RFP) which opened a Question and Answer period. On November 7, 2007, CMS posted a revised Statement of Work. Answers to the questions were posted on November 19, 2007.
Recovery Audit Contractors
On October 6, 2008, the Centers for Medicare & Medicaid Services (CMS) announced the award for four (4) Recovery Audit Contractors. The awards are as follows:
- Region A (Vermont (VT), New Hampshire (NH), Maine (ME), Massachusetts (MA), Rhode Island (RI), Connecticut (CT), New York (NY), New Jersey (NJ), Delaware (DE), Maryland (MD), Washington DC, Pennsylvania (PA)): Diversified Collection Services, Inc.
- Region B (Minnesota (MN), Wisconsin (WI), Michigan (MI), Ohio (OH), Indiana (IN), Illinois (IL), Kentucky (KY)): CGI Technologies and Solutions, Inc.
- Region C (West Virginia (WV), Virginia (VA), Tennessee (TN), North Carolina (NC), South Carolina (SC), Georgia (GA), Alabama (AL), Mississippi (MS), Florida (FL), Arkansas (AR), Louisiana (LA), Texas (TX), Oklahoma (OK), New Mexico (NM), Colorado (CO)): Connolly Consulting Associates, Inc.
- Region D (Washington (WA), Oregon (OR), Idaho (ID), Montana (MT), North Dakota (ND), South Dakota (SD), Wyoming (WY), Utah (UT), Nebraska (NE), Iowa (IA), Kansas (KS), Missouri (MO), California (CA), Nevada (NV), Arizona (AZ), Hawaii (HI), Alaska (AK)): HealthDataInsights, Inc.
RAC Approved Issues
The Region C RAC contractor, Connolly Healthcare, currently has approved issues on their website. The list includes all CMS-approved audit issues. You can locate the issue name, description of the issue, the date of service claims are being reviewed, provider type affected, the states affected and additional reference information. To view the current list go to CMS Approved RAC issues.
Medical Record Submission Requirements
Medical records should be submitted to the RAC contractor within 45 days from the date of the medical record request letter. Medical records may be submitted by paper/fax/CD. Click on the following link for for more information:
http://www.connolly.com/healthcare/pages/RecordSubmission.aspx.
Additional Information
Section 302 of the Tax Relief and Health Care Act of 2006 makes the RAC Program permanent and requires the Secretary to expand the program to all 50 states by no later than 2010. Currently, CMS has 4 RACs in place. Each RAC is responsible for identifying overpayment and underpayments in approximately ¼ of the country.
The Recovery Audit Contractor’s main task is to identify improper payments. The claims processing contractor (A/B MAC/DME MAC) is the entity that is responsible for adjusting the claim, handling collections (offsets and checks), and reporting the debt on the financial statements.
Use the following resources to learn more about the
program.
- Proposed Recovery Audit Contractor Jurisdictions
- Recovery Audit Contractor
- Medicare Claim Review Programs
Page last updated:
October 24, 2012