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Medicare Improper Payment Review

Recovery Auditor Contractors (RAC)

Summary of Program
The Recovery Audit Programís mission is to reduce Medicare improper payments through the efficient detection and collection of overpayments, the identification of underpayments and the implementation of actions that will prevent future improper payments. Section 302 of the Tax Relief and Health Care Act of 2006 requires the Secretary of the Department of Health and Human Services to utilize Recovery Auditors under the Medicare Integrity Program to identify underpayments and overpayments and recoup overpayments under the Medicare program associated with services for which payment is made under part A or B of title XVIII of the Social Security Act. The Act Requires a permanent and nationwide RAC program and gave CMS the authority to pay the RACs on a contingency fee basis. The RACs detect and correct past improper payments so that CMS and Carriers, FIs, and MACs can implement actions that will prevent future improper payments. If you bill fee-for-service programs, your claims will be subject to review by the RACs. RACs are required to employ a staff that consists of nurses, therapists, certified coders, and a physician CMD.

RAC Review Process
RACs review claims on a post-payment basis and will be able to look back three years from the date the claim was paid. There are two main types of review Ė automated (no medical record required) and complex (medical record required). Issues reviewed by RACs will be approved by CMS and be publicly available on the RAC website for review. RACs will accept imaged medical records on CD/DVD.

The collection process for the RAC is the same as process used by carriers, FI and MAC identified overpayments. The RAC will issue a demand letter and then offer an opportunity for the provider to discuss the improper payment determination with the RAC. If providers agree with the RACís determination they can pay by check, allow recoupment from future payments, or request or apply for extended payment plan. If providers disagree, there is an appeals process to follow (https://www.cms.gov/OrgMedFFSAppeals/Downloads/AppealsprocessflowchartAB.pdf). Practices must file an appeal before the 120th day after the RAC Demand letter is sent.

Links to Programs
Each Recovery Auditor is responsible for identifying overpayments and underpayments in approximately ľ of the country. The Recovery Audit Program jurisdictions match the DME MAC jurisdictions.

The Recovery Auditor in each jurisdiction is as follows:
Region A: Diversified Collection Services (DCS)

Region B: CGI

Region C: Connolly, Inc.

Region D: HealthDataInsights, Inc.

Additional Information & Resources

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