RAC 'Em Up: CMS Continues New Audit Program Outreach
SAN FRANCISCO — With its Recovery Audit Contractors going live in some states in March, CMS continues area outreach on the new audit program this week with three sessions at its San Francisco regional office. In-person sessions are also set for Texas this month.
The agency has planned a gradual rollout of the new audit program to all 50 states by 2010. When fully implemented, the RACs — in territories matching the DME MAC jurisdictions — will each be responsible for identifying overpayments and underpayments from previous claims in approximately a quarter of the country.
Under the program, the RACs will be paid a contingency fee based on the amount of improper payments they find and collect. In a final RFP posted on the CMS Web site, contingency fees for the RAC contracts are listed at: Region A, 12.45 percent; Region B, 12.5 percent; Region C, 9 percent; and Region D, 9.49 percent.
According to a CMS representative on a Special Open Door conference call last month, with the high volume of claims Medicare receives — about 4.5 million each workday — those claims "can't possibly receive the type of scrutiny needed to prevent improper payment, so we have the RAC as another tool to try to fix this problem."
On the call, officials confirmed the RAC look-back period has been limited to three years, with a beginning maximum look-back date of Oct. 1, 2007. The RACs will perform two types of reviews: automated, meaning they can make a decision without requesting a medical record; and complex, for which they will request medical records in order to make a decision.
For DME providers, the number of medical records the RACs can request is limited to
1 percent of the average monthly Medicare services per NPI per 45 days, with a maximum of 200 during that period. The RACs aren't set up to receive electronic data interchange, so medical records must be submitted by mail, fax or CD/DVD. The provider has 45 days, plus a five-day mailing window, to submit the medical records.
CMS will have a new issue review board to provide oversight of RAC activities, and a RAC validation contractor will pull a sample of RAC claims to check their accuracy. An annual accuracy score for each RAC will be made public.
In one of the biggest changes from the RAC demonstration, a CMS official said, "One of the things we think is going to help the most to ensure accuracy is, if a RAC loses at any level of appeal, the RAC must return the contingency fee … That's a great incentive for the RACs to double check their work."
Agency officials have said they are encouraging the contractors to be reasonable in their dealings with providers and want to make sure the program is "fair." But according to Walt Gorski, vice president of government affairs for the American Association for Homecare, the program could have a "devastating impact on home care providers because we will be held responsible for what is in the medical record."
Check the CMS's Recovery Audit Contractors Web page for the RAC expansion schedule and an FAQ.