Recovery Audit Contractors
What Are They and Why Should You Care?
Some have referred to them as bounty hunters, because they make money by finding errors in Medicare claims payments. Unlike other Medicare contractors, Recovery Audit Contractors (RACs) are paid only if they find either overpayments that are refunded by/offset from physicians and providers or underpayments resulting in additional payment by the Medicare Administrative Contractor (MAC). During demonstration projects prior to the initiation of the now permanent RAC program, this proved to be incentive for aggressive and sometimes faulty overpayment identification. While the permanent RAC program contains a few safeguards the demonstration project did not, it is safe to say these companies will continue to aggressively seek out errors and omissions.
Healthcare Reform Expands the Scope of the RAC Program
New -- The Patient Protection and Affordable Care Act of 2010 substantially expands the RAC program to include Medicaid and Medicare Advantage (Part C) plans. These plans are required to begin contracting with recovery auditors by the end of 2010. This may significantly increase the likelihood that your practice will have an encounter with a RAC.
Learn more about the RAC
The following questions and answers have been assembled to help AAFP members understand the RAC program and proactively prepare their practices to properly handle any RAC-related activity.
Who is the RAC in my state?
-- Links and contact information to RACs.
Where can I learn what issues the RAC is reviewing?
-- Links to RAC pages identifying CMS-approved issues for review that may affect physician practices.
Whose claims can be reviewed by the RAC?
-- Anyone who submits a claim for services or products under Medicare Part A or Part B ...
Aren’t RACs focusing on hospital claims?
-- Initially, during the RAC demonstration project ...
Do RACs review claims paid by Medicare Advantage Managed Care plans?
-- Not yet. The RAC reviews are limited ...
Do the RACs replace the other entities that review claims for accuracy of payment or investigate physicians' claims?
-- No. Medicare Contractors, Comprehensive Error Rate Testers ...
How far back can RACs look in reviewing claims?
-- RACs are limited to a three-year look back...
Will RACs review claims for evaluation and management services?
-- Yes, but the AAFP along with the....
How will RACs review claims for overpayments and underpayments?
-- RACs may use automated review ...
What criteria will be used by the RACs in determining the medical necessity of services related to a claim?
-- The RAC shall consider a service to be reasonable ...
How can I identify a RAC recovery versus a request for refund from other sources?
-- The demand letters issued by the RAC will ...
If I disagree with an RAC's overpayment findings, can I appeal?
-- Yes. Physicians are provided the same rights ...
Is there limitation on recovery of small overpayments found by the RAC?
-- The RAC shall not attempt recoupment ...
Must I allow the RAC to conduct an on-site review of my medical records?
-- If the RAC attempts an on-site visit ...
If the RAC requests copies of my patient records, will I be paid a fee for my expenses in providing the records?
-- Currently, Medicare does not require ...
When a RAC requests copies of patient records, how long does a physician have to comply with the request?
-- The time limit for responding to a request for records is 45 days ...
Is there a limit to the number of records that the RAC may request from a physician or group practice?
-- Yes. Medicare has published a document ...
What should I do to protect my practice from RAC recovery efforts?
-- Most importantly, continue or implement ongoing compliance ...
