The Recovery Audit Contractor (RAC) program was launched by the Centers for Medicare & Medicaid Services (CMS) in 2010. It is among the most visible of CMS audit initiatives aimed at identifying improper payments, waste, and abuse in the Medicare and Medicaid systems.
The RAC program relies on four regional contractors that are paid a contingency fee based on a percentage of the overpayments they recover. In 2009 and 2010, those fees ranged from 9 percent to 12.5 percent, according to CMS.
The AAFP recognizes the important role that Recovery Audit Contractors play in pinpointing and correcting past, improper Medicare and Medicaid payments. At the same time, we are committed to promoting a fair and accurate audit process while minimizing the administrative disruptions that can accompany an external audit. To this end, the AAFP has most recently sought to influence developments surrounding Recovery Audit Contractor initiatives for the Medicare Part C (Medicare Advantage) and Part D (Prescription Drug Plan) programs.
As RACs and similar programs evolve and mature, the AAFP will continue monitoring the impact of these efforts on family physicians while working with CMS and RAC auditors to ensure that audit and appeals processes are reasonable, timely, and fair.
Joint Letter to HHS Expressing Concern Over the Medicare Appeals Backlog - February 12, 2014(4 page PDF)
AAFP Letter to CMS on Recovery Audit Contractor Program for Medicare Parts C and D - February 23, 2011(2 page PDF)
Joint Letter to CMS Regarding Medicaid Recovery Audit Contractors - January 10, 2011(11 page PDF)
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Recovery Audit Contractors