Understanding Recovery Audit Contractors (RACs): Medicare Overpayment Identification

1. Recovery Audit Contractors AKA: Rotten Accounting Crooks

2. What are RAC’s? • Private Companies—contracted with Medicare • Tasked to identify Medicare overpayments (and underpayments) • Paid on a contingency fee basis • Section 302 of the Tax Relief and Health Care Act of 2006 made the RAC program permanent and required its expansion nationwide no later than 2010

3. Current RAC’s • Diversified Collection Services, Inc. of Livermore, California, in Region A, initially working in Maine, New Hampshire, Vermont,  Massachusetts, Rhode Island and New York.  • CGI Technologies and Solutions, Inc. of Fairfax, Virginia, in Region B, initially working in Michigan, Indiana and Minnesota Ohio and Wisconsin Aug 09 • Connolly Consulting Associates, Inc. of Wilton, Connecticut, in Region C, initially working in South Carolina, Florida, Colorado and New Mexico. • HealthDataInsights, Inc. of Las Vegas, Nevada, 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.

4. What does a RAC do • They review claims on a POST payment basis • They use the same Medicare policies as the FI’s, Carriers and MAC’s • They will not be able to review claims prior to October 1, 2007 • They will be able to go back 3 years from the date the claim was paid

5. What do RAC’s do—cont. • They are mandated to employ; certified coders, therapists, nurses and a physician CMD

6. Data Collection Process • Same as currently used by Medicare except the demand letter for re-payment will come from the RAC • The RAC can now accept Medical Records via CD/DVD and soon via your EMR system • you have 45 calendar days to respond to the medical record request

7. Medical Records LimitsFY 2009 • Physicians (including podiatrists and chiropractors) • Sole Practitioner -10 Medical Records per NPI per 45 days • Partnership (2-5) -20 Medical Records per NPI per 45 days • Group (6-15) – 30 Medical Records per NPI per 45 day • Large Group (16+) – 50 Medical Records per NPI per 45 days

8. Medical Records Limit-cont • Other Part B providers (DME, LAB) • 1% of the average monthly Medicare claim lines (max 200) per NPI per 45 days

9. Upon receipt of RAC demand letter • Determine if the overpayment request is accurate, if so pay back the money or allow on offset to occur or request a payment plan • If the request is not accurate there are 5 levels of appeal • Redetermination by FI or MAC • Reconsideration by QIC • Administrative Law Judge • Medicare Appeals Council hearing • Judicial review in US District Court

10. The Appeal Process • 120 days to file a request for redetermination • 30 days to avoid recoupment • 180 days file a request for reconsideration by QIC • 60 days to avoid recoupment • 60 days to file a request for an ALJ hearing • CMS will recoup the money at this stage and beyond • 60 days to file an appeal to the MAC • 60 days to file for federal district court hearing

11. The Appeal Process-cont • If the RAC loses the appeal at any stage they must re-pay their contingency fee

12. What can you do to be ready? • Ensure accuracy of your own Medical Records- have your charts audited-if it isn’t documented it didn’t happen • Review previous overpayment letters you received from Medicare—learn from past experience • KNOW the Appeal process and do it!!

13. What can you do to be ready?-cont • Look to see what improper payments the RAC’s have discovered-each RAC will post these to their websites • See what improper payments have been found in OIG and CERT reports www.oig.hhs.gov/reports.html www.cms.hhs.gov/cert

14. Contact Information • www.cms.hhs.gov/rac • Email: RAC@cms.hhs.gov • RACB.cgi.com