The Centers for Medicare & Medicaid Services (“CMS”) recently confirmed that the Recovery Audit Contractors (“RACs”) will operate in all 50 states by the end of 2009.  RACs identify overpayments and underpayments by CMS to Medicare providers.

The permanent RAC program began with a three-year RAC demonstration project established under the Medicare Modernization Act of 2003. The Tax Relief and Health Care Act of 2006 made the RAC program permanent and authorized CMS to expand it to all 50 states by 2010.

Unlike the demonstration project, the permanent RAC program limits the medical-record review period to three years and prohibits audits on claims paid before October 1, 2007. The program also requires RACs to have a physician medical director and certified coders available to discuss denials with providers.  

 Here are some practical steps that providers should take to ensure that submitted claims meet the Medicare rules:

  • Identify where improper payments have been persistent by reviewing the RACs’ Web-sites and identifying any patterns of denied claims within their own practice or facility.
  • Implement procedures to promptly respond to RAC requests for medical records.
  • If the provider disagrees with the RAC determination, file an appeal before the 120-day deadline.
  • Keep track of denied claims and correct these previous errors.
  • Determine what corrective actions need to be taken to ensure compliance with Medicare’s requirements and to avoid submitting incorrect claims in the future.

© 2009 Parsonage Vandenack Williams LLC

  For more information, contact

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s