FAQ

 

 

 

 

Are patients contacted if their claim is audited?
Patients receive a standard Medicare Summary Notice if a claim is adjusted in any way.
Are the number of claims that can be audited in each period counted by transaction lines (5 per CMS form) or by claim/single CMS form?
Claims are counted by transaction lines.
Are the RACs paid on a percentage of their findings?
Yes, RACs are paid on a contingency fee basis. This includes a percentage of both overpayments and underpayments. The percentage ranges from 9 percent to 12.5 percent based on each RAC's contract.
Can CGI share more information about their customized auditing software?
Algorithms designed by the RACs to specifically identify Medicare claims for audit are proprietary, however, algorithm parameters must be based on established Medicare guidelines (e.g., Social Security Act, Code of Federal Regulations, National and Local Coverage policies, etc.) which are available to the public.
Does the RAC pay for the copying/mailing for records?
RACs are required to pay for medical records associated with acute care inpatient prospective payment system (PPS) hospitals and long term care hospitals. Hospitals and other providers under a Medicare cost reimbursement system receive no photocopying reimbursement.
How are over and under payments handled?
Existing CMS policies and procedures for recouping overpayments or receiving underpayments are currently in place for claim adjustments based on a RAC determination. The underpayment amount will be sent from the claims processing contractor (FI, Carrier, MAC) after the claim adjustment is received from the RAC and processed in the respective claims processing system. In the case of an overpayment determination, a provider may elect to send a check to the claims processing contractor for the amount of the overpayment, or set up an extended repayment plan if appropriate. A provider must follow all existing policies and procedures regarding appeals of a Medicare determination if they elect that course of action.
How can I learn the RAC’s current focus?
CGI's website provides a list of activities that are viewable by specialty. It is recommended you review this on a monthly basis to determine the focus of RAC audits relevant to your speciality. You can view the current RAC schedule by clicking here
If a claim is refunded to Medicare, must the patient be refunded their portion?
Yes, Medicare requires that the provider make the beneficiary whole.
If a refund is made to Medicare do we have to notify the secondary carrier or will it be done for us by CMS?
RAC adjusted claims will be made available to Medicare Secondary Payers. The Medicare Secondary payers will contact providers if necessary.
If medical records are requested for a mental health service, are the psychotherapy notes excluded?
Information/records requested in a RAC Additional Documentation Request Letter (ADR) will depend on the issue being reviewed by the RAC. Any issue for review will be posted on the RAC Website before the RACs may begin widespread review of the issue. The ADR will specify medical records needed for RAC review, however, providers may also elect to forward any additional documentation they feel would help support payment of a claim.
Is there such thing as RAC insurance?
There is no such thing as Recovery Audit insurance, but there is such a thing as appeal insurance.
It was my understanding that we would send entire chart. Is that true?
The Additional Documentation Request Letter (ADR) sent by the RAC will specify any medical records needed for RAC review. A provider may also elect to forward additional documentation they feel would help substantiate payment of a claim.
What determines which region the practice/entity belongs to for RAC?
The state that the practice/entity is located in.
What E&M guidelines does CGI base their audits on?
CGI is not currently reviewing E&M codes, however, the review of all evaluation and management (E & M) services will be allowed under the RAC program. The review of duplicate claims or E & M services that should be included in a global surgery will be available for review consistent with current Medicare policy. CMS continues to work closely with the American Medical Association and the physician community prior to any reviews being completed regarding the level of the visit and will provide notice to the physician community before the RACs are allowed to begin reviews of evaluation and management (E & M) services and the level of the visit.
What if I still have questions about Medicare Audits?
E-mail info@osma.org
Who is the independent organization to appeal to?
The appeals process for RAC determinations is consistent with the current Medicare claims appeals process. If a provider does not agree with a RAC determination, they may appeal the determination as follows:

  • 120 days to file for the 1st level (Redetermination, FI, Carrier, or MAC)

  • 180 days to file for the 2nd level (Reconsideration, Qualified Independent Contractor (QIC)

  • 60 days to file for the 3rd level (ALJ-Administrative law judge)

  • 60 days to file for the 4th level (DAB-Department appeals board)

  • 60 days to file for the 5th level (Federal District court)
Who sets the guidelines for medical necessity?
RACs are not permitted to make their own medical necessity guidelines; they are required to follow all CMS Policies and Regulations regarding medical necessity.
Why did they not combine the Fraud and RAC process together rather than make 2 complete areas that are costly?
Although the goal of both the RACs and the Program Safeguard Contractors (PSCs) is to protect and preserve the Medicare Trust Fund, the RACs focus primarily on identifying improper payments that are the result of billing and clinical judgment errors. The PSCs are tasked with the responsibility of detecting fraudulent and/or abusive billing patterns and behavior in the Medicare program.
Why don't they [RACs] want to pay appropriate charges for records?
As most Medicare Providers are already aware, RACs must follow all CMS policy and guidelines set forth in the Social Security Act and the Federal Code of Federal Regulations (CFR). RACs pay for medical records for certain provider types in accordance with the current formula or any applicable payment formula created by state law. The current per page rate is $.12 per page. For additional information about the formula used to calculate these rates, please reference 43 CFR, Section 476.78(c).
Will a claim be audited if a practice/entity self-audits, finds an error and corrects it?
If a voluntary refund is made on an individual claim and extrapolation is not used, the claim will not be excluded from RAC review. It is important to remember the claims processing contractor has not reviewed the claim (no medical record requested or reviewed), and they are just processing the adjusted claim per a Provider's request. The RAC will have the information for the adjusted claim, but they may decide to review the adjusted claim. Hopefully, if a Provider correctly adjusts a claim to accurately reflect the services rendered and documented, the claim should not be denied.
Will the RACs extrapolate their findings?
The RACs are permitted to extrapolate their findings if they so choose, but are required to follow all CMS policies regarding statistical sampling and rules of extrapolation.