BALTIMORE — CMS held a Special Open Door Forum Thursday to introduce its new Recovery Audit Contractors, tabbed in October to ferret out Medicare overpayments and underpayments. The RACs will be paid a contingency fee based on the amount of the improper payments they correct.
While providers have questioned CMS' payment method for the RACs, agency official Connie Leonard said the contractors will be evaluated on customer service, and that there is "no quota per se that they have to meet in order to maintain their contracts."
The new audit program will be in place nationwide by Jan. 1, 2010, even though protests filed by two unsuccessful RAC contract bidders have put it on hold for now (see "RAC Outreach Halted as GAO Probes Contract Protests", HomeCare Monday, Nov. 10), an official said, noting the Government Accountability Office has until approximately mid-February to issue a decision on the protests.
In a three-year demonstration in six states—California, Florida, New York, Massachusetts, South Carolina and Arizona—CMS gave the RACs $317 billion in paid claims data on which more than $900 million in overpayments was collected and $37 million found in underpayments.
Those results propelled the agency to implement permanent RACs in areas that match the four DME MAC jurisdictions, and the post-payment review program will eventually roll out to all 50 states.
The permanent RACs will begin working in the following states:
- Diversified Collection Services of Livermore, Calif., in Region A, initially working in Maine, New Hampshire, Vermont, Massachusetts, Rhode Island and New York;
- CGI Technologies and Solutions of Fairfax, Va., in Region B, initially working in Michigan, Indiana and Minnesota;
- Connolly Consulting Assoc. of Wilton, Conn., in Region C, initially working in South Carolina, Florida, Colorado and New Mexico; and
- HealthDataInsights of Las Vegas, Nev., in Region D, initially working in Montana, Wyoming, North Dakota, South Dakota, Utah and Arizona.
Additional states will be added to each RAC region in 2009.
"The program mission has been and always will be to protect and correct past improper payments so that CMS can implement action that will prevent future improper payment," said Ebony Brandon, a project officer for RAC Region A. She and CMS official Gia Lawrence gave the following information about the new RACs:
- The "maximum look-back date" for the permanent RACs is Oct. 1, 2007.
- The RACs will choose areas of focus based on their own data-mining techniques, so they could use OIG, GAO and CERT reports in order to determine what kinds of claims to review.
- There are two types of review: "automated" and "complex." An automated review does not require a medical record, where a complex review requires the RAC to request medical records from the provider, and then to review those records within 60 days. A provider's failure to submit the records within 45 days will result in an automatic denial.
- New issues for review will be posted to each region's RAC Web site, although CMS is still working with the RACs on medical records limits, which if changed, will be posted to the Web sites.
- The RACS will use the same medical policies as the MACs: national and local coverage determinations and CMS manuals. They are also required to use the same type of staff as the MACs, including nurses, therapists, a full-time physician medical director and a certified coder.
- Some examples of improper payments the RACs will be looking for include medically unnecessary services, incorrect coding and duplicate claims.
- Each RAC will offer a "period of discussion" to providers if an improper payment is found. For an automated review, the period begins when the provider receives a demand letter. For a complex review, discussion begins with a review results letter. During the discussion period, providers can furnish more information to support their claims; however, the discussion period ends on the day of recoupment.
- Providers who receive RAC demand letters can either: allow recoupment, pay by check, file an appeal or sign up for an extended payment plan. If a provider appeals a finding and the RAC loses the appeal, it must return the contingency fee.
What can you do to prepare? According to Lawrence:
"See what improper payments were found by the RAC in the demonstration … Also, you can conduct internal assessments within your own facility … to identify if you are compliant with Medicare rules. You might want to think about providing in-services or refreshers to your staff" on issues such as correct coding and making sure the correct diagnosis is listed on all claims.
In addition, Lawrence said, make sure the RAC has the right address and contact information for your company, check on the status of medical records and "keep track of any denied claims, look for patterns and determine what action you need to take."
For more information on the permanent RAC program, a map of future RAC expansion and a report on the three-year RAC demonstration, see the RAC Web site.
On Nov. 20, CMS will post an audio recording of the teleconference, which also included a host of questions from the audience of 860 listeners, to the Special Open Door Forum Web site. The recording will be available for 30 days.