RAC ‘em Up: New Contracts and Changes Coming to the RAC Program

After months and months of delay, CMS finally released a Request for Proposal (RFP) in early November for those interested in serving as Recovery Auditors in the new contract term, set to begin on Jan. 1, 2016. CMS also recently released updates on enhancements to the Recovery Audit Contractor (RAC) Program that are both currently in place and in progress. These developments have important implications for providers.

Critical Timelines for Improper Payment Filings

CMS realizes that the new contracts for Recovery Auditors will not be in place by Jan. 1, and is actively working to obtain modifications with the existing contractors, which would allow activities to continue through July 31, 2016. Should a contractor choose not to agree to accept the modifications, providers should keep in the mind the following:
  • Recovery Auditors could not have sent Additional Documentation Requests (ADRs) any later than October 16, 2015
  • The last day that a Recovery Auditor can send an improper payment file to a Medicare Administrative Contractor (MAC) for adjustment is December 31, 2015
Assuming the modifications are accepted and the modified contracts are signed, the existing contractors may resume their activities through the extended period.

Providers Gain Some Relief Through RAC Program Enhancements

Enhancements to the RAC Program are numerous and include:
  • Recovery Auditors are required to maintain an overturn rate of less than 10 percent at the first level of appeal
  • Recovery Auditors are required to maintain an accuracy rate of at least 95 percent
  • Recovery Auditor look-back period is limited to six months as long as the provider submits the claim within three months of service
  • Recovery Auditors must incrementally apply the ADR limits to new providers under review
  • Recovery Auditors are required to have a Contractor Medical Director and are encouraged to have a panel of specialists available for consultation
  • Recovery Auditors must provide consistent and more detailed review information concerning new issues to their websites
  • ADR limits are to be established based on a provider’s compliance with Medicare rules, with those with low denial rates having lower ADR limits and those with higher denial rates having higher ADR limits
  • Provider Satisfaction Survey is being developed that will give providers an opportunity to give feedback on the Recovery Auditors
  • CMS will provide increased public reporting of data on all aspects of the RAC Program
In addition to the aforementioned enhancements that are currently in place or in progress, the following changes are proposed as part of the contract modification process:
  • Recovery Auditors would have 30 days to complete complex reviews vs. the current 60 days
  • Recovery Auditors would have to wait 30 days to allow for a discussion request before sending the claim to the MAC for adjustment
  • Recovery Auditors would have to acknowledge receipt of a provider’s discussion request or other written correspondence within three business days
  • CMS would work with Recovery Auditors to enhance their provider portals for better uniformity and consistency
  • Recovery Auditors will not receive a contingency fee until after the second level of appeal is exhausted
What do all of these changes mean to providers?

The hope is that providers will view the process as being more equitable and feel that they have a voice as to the effectiveness of the program. However, to realize the benefits of the enhancements, providers must implement effective tracking and monitoring practices that address each of the RAC audits that the organization is involved in and ensure that the Recovery Auditors are complying with the revised rules of CMS. Opportunity is knocking, but providers must open the door to take full advantage of these changes to minimize the impact of their RAC audits.