Medicare Compliance & Reimbursement

Physician group urges CMS to have its RACs focus only on hospitals.

The Recovery Audit Contractors (RACs) will be coming to your town soon.

These so-called "bounty hunters" receive more money if they collect overpayments (or uncover underpayments). Until now, they've only operated in three states, but they'll expand nationwide by Jan. 1, 2010. So far, they've collected $69 million, only 6 percent of which came from doctors, Centers for Medicare & Medicaid Services (CMS) officials told the March 5 Practicing Physicians Advisory Council (PPAC) meeting.

Because such an insignificant part of the RACs' bounty came from doctors, PPAC voted to urge CMS to instruct the RACs to focus only on hospitals.

The RACs will be hiring medical directors, according to Physician Regulatory Issues Team Director William Rogers. Also, if too many physicians successfully appeal overpayment demands from the RACs, the contractors may bear some financial penalties--or even lose their contracts.

PPAC advised CMS to give providers an extra 25 percent of any RAC-related overpayments that they appealed successfully, to compensate for the expense
of appealing.