CMS Hears Call for RAC Demand Letter Improvement

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  • December 30, 2011
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Influenced by the opinion of the American Hospital Association (AHA) and state and regional hospital associations, CMS recently announced that it is revising its alleged overpayments demand letter sent to health care providers under the Medicare Recovery Audit Contractor (RAC) program.

According to a Dec. 14 release, Medicare administrative contractors (MACs), starting in January, “will assume responsibility for sending the letters under a CMS policy change announced earlier this year to address timeliness concerns raised by hospitals … According to CMS, the “R” before the letter number is intended to help providers identify the letter as a RAC-initiated claim and redirect it to the appropriate staff.”
AHA said that although they “urged CMS to require MACs to send the letters to a RAC contact address provided by the hospital,” CMS implied “it was unable to accommodate such an address in its computer system.”
Hospital departments that receive MAC correspondence:

  • Must distribute the RAC demand letters to appropriate staff;
  • Should speak with their MAC about ways to improve the process; and,
  • Should learn whether their RAC’s provider portal indicates when a demand letter has been sent.

A sample of the new letter, with highlighted changes, can be found on the AHA website. Direct any questions you have about the new letter and policy to CMS RAC Project Officers.

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