The Tax Relief and Health Care Act of 2006 mandated that Medicare implement a permanent and nationwide Recovery Audit Contractors (RAC). The RAC program is designed to identify Medicare improper payments and to recoup overpayments or disburse underpayments.
RAC Contractors Claims Review Process RAC Appeals Process
CMS has contracted with four firms to oversee the national RAC Program. The RAC contractors began operating in twenty-two states in March 2009. Implementation in the remaining states will occur before the end of the year. These contractors will be divided by region and state as follows.
The RACs are charged with detecting and correcting past improper payments under Medicare Parts A and B. RAC's will notify providers of improper payments through the issuance of a Demand Letter. The number of Part B (or physician) claims a RAC can review is limited by practice size.
The RAC look back period extends to three years from the claims paid date. However, the RACs will not be able to review claims paid prior to October 1, 2007. Also, according to a CMS official who spoke at IDSA’s 2009 Clinical Practice Meeting, the RAC’s are unlikely to challenge claims with one level Evaluation and Management (E&M) coding differences during the first year or two of the program.
Physicians who receive demand letters from a RAC have the right to appeal. The appeal process for RAC overpayment determinations is the same as the appeal process for Medicare Carriers, Fiscal Intermediaries, and Administrative Contractors. If you disagree with the RAC determination, do not stop with contacting the RAC (calling or sending a Discussion Letter to the RAC does not constitute a formal appeal). File a formal appeal no later than 120 days after the Demand Letter is issued.
*Important* Regardless of whether you plan to appeal an overpayment determination, you must submit a check to the RAC for the overpayment amount within 30 days from the date the Demand Letter is issued. This will avoid interest being charged on top of the overpayment amount. Regardless of whether you plan to appeal an overpayment determination, you must submit a check to the RAC for the overpayment amount within 30 days from the date the Demand Letter is issued. This will avoid interest being charged on top of the overpayment amount.
Please e-mail IDSA staff or call 703-299-5146 with any questions or comments.
Medicare's Recovery Audit Contractors Presentation
Medicare Appeals Process Brochure
RAC Appeals Process Fact Sheet (provided courtesy of the AMA)
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