Medicare Recovery Audits

Through its national recovery audit contractor (RAC) program, Medicare has hired contractors to examine medical records and identify overpayments and underpayments. According to CMS, the most common types of improper payments involve services that lack medical necessity, are improperly coded or lack sufficient documentation.

Unlike previous Medicare anti-fraud measures, this one is here to stay. RAC was mandated by Congress as a permanent, national program. CMS recommends that practices affected by RAC conduct internal audits to make sure their claims comply with Medicare rules.

Important Facts

  • RACs may review paid claims as far back as Oct. 1, 2007 (claims paid date).
  • RACs perform post payment review on paid claims using the same Medicare policies (including National and Local coverage decisions) used to pay the claim initially.
  • RACs perform two types of reviews: Automated Reviews which do not request medical records and Complex Reviews which will request medical records.
    • Automated Reviews
      • An Overpayment Demand Letter sent detailing the reason for the overpayment determination, the amount of the overpayment requested and appeal rights.
      • Providers may elect to repay an overpayment by writing a check, allowing offset from future payments or by applying for an extended payment plan.
    • Complex Reviews
      • Entail a request for medical records. Records can be mailed, faxed or sent on a CD/DVD. Mailed records must be sent in a tamper-proof package, and should be sent via trackable carriers (FedEx, UPS, Registered USPS.) Multiple records may be sent in one package if each record set is in a separate envelope inside the package. Note: if faxing, fax the records to yourself to check for readability before you fax to the RAC. E-mail records are currently not accepted.
      • Providers have 45 days plus 10 mailing days for a total of 55 days to send the records, but the RACs are permitted to grant an extension if contacted in a timely manner. Failure to communicate with your RAC about problems you are encountering in sending the records may result in technical denial and automatic recoupment of the related claim.
      • Once a RAC receives the medical records and a determination has been made, they will send the provider a Review Results Letter which will detail the findings. At this point, if the provider disagrees with the RAC determination, they may contact the RAC and discuss the findings and/or provide additional information. If after discussion you still disagree with the RAC determination, you may elect to file an appeal with the respective claims processing contractor. For automated review determinations, this discussion period takes place after provider receipt of the overpayment demand letter.
      • Appeals must be filed within 120 days of the receipt of the demand letter from the RAC.
         

The resources below will help you establish a program for your practice.

OSMA RAC Educational Opportunities

Take Advantage of OSMA RAC Educational Opportunities

 

OSMA Consulting Services

OSMA Practice Consulting provides the following services to assist physician members in the successful management of their medical practice. Our consultants can work with you to customize services specific to your needs.

 

CMS RAC Resource Center

Here you will find useful resources, such as a brochure discussing the Medicare appeals process (used for challenging a RAC's findings) and a diagram illustrating the five appeal stages or levels and their corresponding timelines. You can also access a list of frequently asked questions on issues such as medical record request limits and how RACs are paid. Finally, the resource center also allows providers to sign up for RAC e-mail updates from CMS.

 

CGI Web site

For purposes of implementing and carrying out the RAC program, CMS has divided the United States into four separate regions (A, B, C and D) and awarded contracts to companies who will be serving as the designated RAC in each. In Region B, which includes Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio and Wisconsin, CGI Technologies and Solutions, Inc. (CGI) of Fairfax, Virginia, has been selected as the RAC. CGI has recently added a sample of the updated demand letter and envelope they will be using for all correspondence. Take a look and share it with other staff to be sure everyone knows this is important mail! CGI’s Helpline: (877) 316-7222

 

RAC Issues List

19 new issues were posted 1/18/10. CGI is required to obtain CMS approval for all areas of review that are identified. Any potential new issue must be reviewed and approved by CMS and then posted to the CGI Web site before a review can be performed.

 

RAC FAQs

 


 
If you have questions about Medicare Recovery Audits, e-mail info@osma.org.