Recovery Audit Contractors (RACS) – What’s new?

In this third and final article in the series, the Advocacy Council addresses the activities of Medicare’s Recovery Audit Contractors (RACs).  RACs conduct post-payment review audits of Medicare providers, including physicians, to look for improper Medicare and Medicaid payments.  They are private companies under contract to CMS. They get paid on a contingency fee basis – something that has sparked the ire of the health care provider community which likens them to bounty hunters.  Despite some successful efforts in recent years to limit RAC activities, they are still one of CMS’ most successful programs for recouping Medicare and Medicaid dollars. Therefore, we can expect them to be around for a while. 

RACs select the topics or areas they want to review which must be approved by CMS.  Although most RAC audits have focused on institutional providers like hospitals, CMS indicates it is broadening RAC audits to include more provider types.  Consequently, we can expect that RAC audits of physicians will increase.

Some things you should know about RAC audits:

  • RACs are limited in the number of patient records they can request for complex reviews based on the size of the practice.
  • Physician’s have 30 days to request a discussion with the RAC after being notified of audit results.
  • RACs must confirm receipt of discussion request within 3 days.
  • RACs are required to post – on their websites – the topic areas they will be auditing. You should be able to check to see if any are relevant to your practice.
  • Look-back period is three years from date of payment for outpatient claims.

More information about RAC audits and a map showing  RAC jurisdictions are on the CMS website.

  • Region 1: MI; IN; OH; KY; NY; CT; RI; MA; ME; NH; VT.
  • Region 2: MN; WI; IL; IA; MO; AR; MS; LA; TX; OK; KS; NE
  • Region 3: TN; AL; GA; FL; SC; NC; VA; WV
  • Region 4: ND; SD; WY; MT; ID; UT; AZ; CA; NV; OR; WA

CMS approved issues for each RAC can be found at the following:

Region 1: Issues under review

Regions 2 and 3: Who we serve – CMS approved issues

Region 4: New issues

Advocacy Issue: 
Billing, Coding & Payments