CMS Touts Changes to RAC Audits

In a blog dated May 2, 2019, Seema Verma, the Administrator of the Centers for Medicare & Medicaid Services (CMS), announced that major changes have been made to the Recovery Audit Contractor (RAC) Program. According to Ms. Verma, changes were made primarily in response to numerous complaints from providers so that the “RAC-related provider burden” has been reduced to an “all-time low.” Here are examples of key improvements made to the RAC Program:

Better Oversight of RAC’s

RACs will now be held accountable for their performance by requiring them to maintain a 95% accuracy rate. RACs that fail to maintain this rate will be subject to a progressive reduction in the number of claims they are allowed to review.

RACS are required to maintain an overturn rate of less than 10%. Failure to maintain this rate will also result in progressive reductions in the number of claims RACs can review.

RACs will not receive contingency fees until after the second level of appeal is exhausted, instead of immediately after denials and recoupment of claims, to help ensure that RACs’ decisions are correct before they are paid.

Reducing Provider Burden and Appeals

RACs are now required to audit proportionately to the types of claims providers submit instead of allowing RACs to select certain types of claims to audit.

RACs will conduct fewer audits for providers with low claims denial rates.

Providers now have more time to submit additional documentation before repaying claims. A 30-day discussion period after an improper payment is identified means that providers do not have to choose between initiating discussions about denials and filing appeals.

Increasing Program Transparency

CMS will regularly seek public comment on proposed RAC areas for review before the reviews begin, which will allow providers to voice concerns about potentially unclear policies that are part of proposed reviews and to better prepare for RAC reviews before they begin.

RACs must enhance their provider portals so that it is easier for providers to understand the status of claims.

While the above changes are certainly welcome, providers may conclude that they are too little, too late – especially those providers who have appeals pending for many years because of the backlog of appeals at the ALJ level. Or worse yet, those provider who have been put out of business! It seems fair to say that some of the changes and the unfair outcomes they intend to correct should have been put in place when RAC audits were initiated.

©2019 Elizabeth E. Hogue, Esq. All rights reserved.

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