Recovery Audit Contractor Program

What is RAC? In 2003, the Federal government started a demonstration project called the Recovery Audit Contractor program (RAC), this program was first implemented in six States to help identify and recover funds that were overpaid to health care Federal Medicare/Medicaid program. Georgia Medicaid RAC) In 2006, the Tax Relief and Health Care Act made the Medicare RAC program a permanent fixture, and the program was expanded to cover all 50 states. In 2010, the Patient Protection and Affordable Care Act (ACA) enacted a provision requiring that each state establish a Medicaid RAC program for its state Medicaid program. Today the RAC program is divided into four regions, with one Medicare RAC servicing each region. The regions are referenced as Region A, Region B, Region C, and Region D. Each region has its own contractor RAC and headquarters division.

The goal of the RAC program is to identify improper payments made for claims for health care services of Medicare beneficiaries, identify and prevent fraud, abuse and waste of Medicare payments paid to health care providers under fee-for-service Medicare plans. (Georgia Medicaid RAC) In order to identify these issues RAC does a review process (audit) to detect these underlying issues. What type of audits will the RAC program cover? The two types of review processes that the RAC program utilizes are the automated review and the complex review.

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The automated review requires no medical record; errors found during the automated review must be clearly noncovered services or incorrect application of coding rules and must be supported by Medicare policy, or approved by coding guidance. (Georgia Physician) The complex review requires a medical record, and may require a physician to submit medical documentation. In addition, records requiring a complex review are those with high probability of noncovered service or when on definitive Medicare policy, Medicare article, or Medicare sanctioned coding guideline exists. Georgia Physician) RAC audits can review all aspects of the medical record including but not limited evaluation and management (E/M) services as related to those that should be reimbursed as a component of a global surgery package, as well as those on duplicate claims. By CMS regulations RACs are generally permitted to request 10 medical records every 45 days from a private practice physician and up to 50 medical records every 45 days from a large physician group.

Although RAC auditors can subject a review of a medical claim at any time , to minimize provider burden, Recovery Auditors may look back only three years from the date the claim was paid; however, recovery auditors are not be able to review claims paid prior to October 1, 2007. The RAC audits specifically aim to identify claims that have been paid incorrectly, either by over or under paying the claim. What could happen if it is discovered by RAC that health care organization may be committing fraud? Is there an appeal process? RAC uses software to identify claims that may not meet Medicare regulations and policy requirements.

When a claim appears to have been paid improperly, RAC will notify the provider and either request medical records or repayment. If the health care organization does not agree with the RAC decision then it has the right to an appeal. RAC has implemented a rigorous and tightly managed appeals process to ensure that the institution can take full advantage of the appeal as allowed under law. In the RAC program appeal process there are five levels of appeals. In each appeal level if the denial is upheld then the providers next option is to file to the next level of appeal. Within each level there is certain criterion that must be met. MedFocus) 1. Redetermination appeal must be filed within 120 days of RAC decision, in this level additional documentation can be submitted. 2. Reconsideration-must be filed within 180 days from first level denial, this is an appeal to the RAC contractor. 3. Administrative Law Judge-appeal must be filed within 60 days of the preceding decision, in this level the appeal is presented before a judge. 4. Medicare Appeals Council-appeal must be filed within 60 days of third level appeal. 5. US District Court- this is the final level of appeal for judicial review, the appeal must be filed within 60 days of fourth level judicial appeal decision.

Why is RAC important to my organization? When a healthcare provider accepts Federal Medicare/Medicaid patients, it becomes liable to not only render the health service to the Medicare patient but also submit proper documentation that shows proof of service for reimbursement. Medicare is required by law to pay claims for health care services provided to Medicare beneficiaries within 30 days of the date the claim was submitted. (MedFocus) After a claim is paid, CMS or one of its RAC contractors can review the claim to ensure that the items or services were medically necessary.

Since the RAC program audits are active in all states, all healthcare entities that bill Medicare are subject to periodic reviews by RACs. How can my organization prepare for RAC? In order to prepare for RAC all the health organization medical staff, executive staff, and staff of the organizations’ finance department should be knowledgeable about the RAC system and its role in the Medicare billing process. (AHIMA RAC Ready) Some of the most important steps in preparing for RAC audits are for the organization to consistent in its every day function such as: *Implementing a compliance plan, that is followed and kept up to date Continually update the medical coder’s knowledge of coding and billing rules *Review documentation requirements for each service that is provided *Practice and keep medical records legible and in order *Implementing a guiding team that will be responsible for creating the goals, organizational structure, and operating processes for an ongoing RAC management program In preparing for the RAC audits, it is important that each healthcare organization understand who needs to be involved in the RAC process, develop appropriate policies and procedures, and implement educational initiative to support the RAC review process programs.

Reference List AHIMA, RAC Ready: How to prepare for the Recovery Auditor Contractor Program, http://library. ahima. org/xpedio/groups/public/documents/ahima/bok1_044065. pdf Georgia Department of Community Health Recovery Audit Contractor (RAC) http://ga. mslc. com/uploadedFiles/Georgia/GA%20RAC%20Q%20and%20A%20V%201. 01%20-%20052412. pdf Georgia Physicians “Medical Record/Recover Audit Contractors” http://www. mag. org/sites/default/files/downloads/georgia_rac_chart_092411. pdf MedFocus, Recovery Audit Contractor(RAC) Program, http://www. medfocusrcm. com/news/recovery-audit-contractor-rac-program

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