Medicare Recovery Audit Contractors RACs

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MedicareRecovery Audit Contractors (RACs)

Connie Leonard, Director, Division of Recovery
Audit Operations Melanie Combs-Dyer, CMS
RAC Senior Technical Advisor
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Background IPIA

• Improper Payment Information Act requires federal
  agencies to measure improper payment rates
• Improper payments include
• overpayments
• underpayments

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RAC Legislation

• Medicare Modernization Act Section 306
• required RAC demonstration
• Tax Relief Act and Healthcare of 2006, Section
  302
• requires permanent and nationwide RAC program
  by no later than 2010
• Both statutes gave CMS the authority to pay RACs
  on a contingency fee basis.

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RAC Program Mission

• to detect and correct past improper payments,
• to implement actions that will prevent future
  improper payments.
• Providers can avoid submitting claims that dont
  comply with Medicare rules
• CMS can lower its error rate
• Taxpayers future Medicare beneficiaries are
  protected

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Results of the RAC Demonstration Collections
exceeded costs
Report now available at www.cms.hhs.gov/RAC
3/27/05-3/27/08 (Claim RACs MSP RACs)
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Results of the RAC DemonstrationAppeals were
minimal
Cumulative through 3/27/2008
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Results of the RAC Demonstration RACs affected a
very small percentage of all Medicare Payments

1.0 billion
316 billion
Medicare Payments corrected by the RACs
Medicare Payments Unaffected by RACs
0.3
99.7
3/27/05-3/27/08 (Claim RACs MSP RACs)
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Results of the RAC DemonstrationMost
overpayments were collected from inpatient
hospitals
6 IRF, 59.7m
2 Skilled Nursing, 16.3m
85 Inpatient Hospital, 828.3 m
4 Outpt. Hospital, 44.0m
1 Durable Med Equip, 6.3m
2 Physician, 19.9m
lt1 Ambulance/Lab/Other, 5.4m
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SOURCE RAC Data Warehouse
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Lessons Learned
Concern RACs had a significant financial impact
on some providers

• Change
• Limit the number of medical record requests
• Limit the RAC look-back period

• Concern RACs were not required to hire
  physicians and certified coders
• Change
• CMS has required each RAC to hire a physician
  medical director
• CMS has required each RAC to hire certified
  coders

• Concern Some providers questioned the accuracy
  of RAC reviews
• Change
• New issue review board (greater oversight)
• Independent validation contractor
• Annual accuracy rates for each RAC

• Concern The RAC program was not transparent
  enough
• Change
• New issues posted to web
• Vulnerabilities posted to web
• RAC claim status website

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RAC Expansion Schedule
A
D
B
Oct. 1, 2008
March 1, 2009
Aug. 1, 2009 or later
C
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Key Website Contact Information

• www.cms.hhs.gov/RAC

RAC_at_cms.hhs.gov
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Provider Feedback Questions

• How would you (providers) like to learn about the
  Recovery Audit Contractor program? What is the
  best vehicle for reaching and providing outreach
  to providers?
• How would you (providers) like to learn about
  vulnerabilities identified by a Recovery Audit
  Contractor? What format will help you in your
  practice or facility? (These are vulnerabilities
  that have been identified in a large scale.
  These are not specific findings for a single
  facility. Specific findings will be communicated
  through written correspondence.)
• All Recovery Audit Contractors will develop a
  web-based tracking system to allow providers to
  track claims requested by a RAC. What
  information should the RACs include in this
  system? Please keep in mind that Personal Health
  Information (PHI) cannot be included.