MAC Demand Letters Replace RAC Demand Letters

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  • August 11, 2011
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As of Jan. 3, 2012 you no longer have to worry about receiving demand letters from recovery audit contractors (RACs). Instead, if a RAC—now referred to simply as a “recovery auditor”—identifies an instance of improper payment, it will submit a claim adjustment to the appropriate Medicare administrative contractor (MAC). The MAC will then issue an automated demand letter for any overpayment, and will follow the same process as is used to recover any other overpayment. The decision to shift responsibility for issuing demand letters from RACs to MACs was made “to increase consistency and efficiency through automation,” according to the Centers for Medicare & Medicaid Services (CMS).

Your MAC also “will be responsible for fielding any administrative concerns you may have, such as time frames for payment recovery and the appeals process,” per MLN Matters article 7436. Although MACs will be responsible for issuing demand letters and collecting overpayment, if you wish to challenge the recovery auditor’s findings, you must appeal to the recovery auditor. MLN Matters article 7436 states that the Medicare contractor will include the name of the initiating recovery auditor and his or her contact information in the related demand letter, and you “should contact that Recovery Auditor for any audit specific questions, such as their rationale for identifying the potential improper payment.”
The bottom line: Come 2012, MACs will automatically issue demand letters and recover alleged overpayments—even those based on unsubstantiated recovery auditor findings. If the recovery auditor makes a mistake, providers will have to work with the recovery auditor to clarify the problem, and then appeal to their MAC to have payments returned to them.

Certified Professional Medical Auditor

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