What Can Medicare Providers Expect from CMS's Recovery Audit Contractor Programs

The Centers for Medicare and Medicaid Services (CMS) created the Recovery Audit Contractor (RAC) program to identify potential Medicare overpayment and allegedly, underpayments.  The types of claims that will be selected for review are unpredictable, but claims for inpatient hospital services have been known to receive more auditing than other types of claims.  However, the potential for RACs to expand into different areas is more than likely due to the government's recent initiative to step up enforcement. 

Providers and attorneys representing providers and suppliers in RAC appeals should keep in mind that RACs are compensated by a contingency fee based basis, and therefore a bias automatically exists in the system.  Providers and their attorneys should address this bias by going through the formal administrative appeals process that involves five levels, i.e., redetermination, reconsideration, a hearing before an administrative law judge, a review by the Medicare Appeals Council if necessary, and finally, judicial review in a federal district court.

The RAC program has been hitting providers in Texas so concern over potential RAC auditing activity should be considered.  In anticipation of a RAC audit, providers and suppliers can begin efforts to understand audit defenses and setting aside resources to defend against these audits.