What’s Changing with RACs?

As prospective recovery audit contractors (RAC) line up to be selected for the next phase of the program, changes to the Centers for Medicare & Medicaid Services’s  (CMS’s) Recovery Audit Program continue with a May 7 directive to recovery auditors that the last day they may send claim adjustment files to Medicare administrative contractors (MACs) is June 1, 2014.  RACs may complete all discussion periods underway as of June 1, but they will not be required to update their websites with new or approved issues.

These instructions amend others recently posted by CMS as they enter the next round of the procurement process for Recovery Audit Program contracts.  Important dates that have already passed include the following:

  • February 21 was the last day a recovery auditor could send a postpayment Additional Documentation Request (ADR).
  • February 28 was the last day a MAC could send prepayment ADRs for the Recovery Auditor Prepayment Review Demonstration.
  • June 1 is the last day a recovery auditor may send improper payment files to MACs for adjustment.

Changes Benefit Providers

Changes to CMS’s Recovery Audit Program rules benefit providers. The agency is changing the confirmation process for communications, the type and number of additional document requests (ADR), and restricting RACs from receiving contingency fees until the second level of appeal is exhausted. Here is a chart with more information:

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Concern Program Change
  • Upon notification of an appeal by a provider, the recovery auditor is required to stop the discussion period.
  • Recovery auditors must wait 30 days to allow for a discussion before sending the claim to the MAC for adjustment. Providers will not have to choose between initiating a discussion and an appeal.
  • Providers do not receive confirmation that their discussion request has been received.
  • Recovery auditors must confirm receipt of a discussion request within three days.
  • Recovery auditors are paid their contingency fee after recoupment of improper payments, even if the provider chooses to appeal.
  • Recovery auditors must wait until the second level of appeal is exhausted before they receive their contingency fee.
  • Additional documentation request (ADR) limits are based on the entire facility, without regard to the differences in department within the facility.
  • CMS is establishing revised ADR limits that will be diversified across different claim types (e.g., inpatient, outpatient).
  • ADR limits are the same for all providers of similar size and are not adjusted based on a provider’s compliance with Medicare rules.
  • CMS will require recovery auditors to adjust the ADR limits in accordance with a provider’s denial rate. Providers with low denial rates will have lower ADR limits while provider with high denial rates will have higher ADR limits.
Brad Ericson

Brad Ericson

Publisher at AAPC
Brad Ericson, MPC, CPC, COSC, has been publisher for more than nine years. Before AAPC he was at Optum for 13 years and at Aetna Health Plans before that. He has been writing and publishing about healthcare since 1979. He received his Bachelor's in Journalism from Idaho State University and his Master's of Professional Communication degree from Westminster College of Salt Lake City.
Brad Ericson

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Brad Ericson, MPC, CPC, COSC, has been publisher for more than nine years. Before AAPC he was at Optum for 13 years and at Aetna Health Plans before that. He has been writing and publishing about healthcare since 1979. He received his Bachelor's in Journalism from Idaho State University and his Master's of Professional Communication degree from Westminster College of Salt Lake City.

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