Medicare Recovery Audit Contractor (RAC) Update - Spring 2009

March 31, 2009

This listserve is a continuation of a series of listserves updating our clients on developments surrounding the Centers for Medicare and Medicaid Services (CMS) claims and activity Recovery Audit Contractors (RACs). Future updates will be provided on this listserve as they become available.

GAO Stay Lifted - RAC Provider Outreach Sessions Now Under Way

Viant and PRG-Schultz, two unsuccessful bidders to become the RAC for one of four CMS-designated regions, previously filed protests to the bid awards with the Government Accountability Office (GAO) pursuant to the Competition and Contracting Act of 1984. This resulted in the GAO placing a stay on all RAC activity until the protest could be resolved. This protest has now been settled, with Viant and PRG-Schultz being named as subcontractors for the RAC program.

With the resolution of the bid protest, the stay has been lifted and the RAC program is once again under way. RACs for the states involved in the first phase of the national rollout of the permanent program have begun conducting provider outreach sessions. Provider outreach is the first step in the process of implementing the RAC program with providers in these areas. Donald Johnson, Acting Director of the CMS Office of Legislation, in his February update to the House of Representatives and Senate indicated that providers will not receive correspondence from a RAC until the RAC and CMS have completed provider outreach. Accordingly, providers can expect to hear about provider outreach sessions and have an opportunity to communicate with the RAC for their region prior to receiving any RAC notices or medical record requests.

Provider outreach sessions are generally hosted by state hospital or other medical trade associations and are conducted jointly by CMS and the RAC for the region. CMS has recently posted on its website a Provider Outreach Schedule for Regions A, B, and C. Visit the CMS website for more information.

RAC “Validation Contractor” Selected by CMS

CMS has contracted with Provider Resources, Inc, an Erie, Pennsylvania-based company, to serve as the RAC Validation Contractor (RVC). The RVC is responsible for reviewing and approving new issues and audit targets the RACs develop to identify incorrect payments. The RVC is also responsible for performing accuracy reviews on a sample of randomly selected claims on which the RACs have already collected overpayments. It is expected that the RVC will provide an additional layer of oversight for the RAC program beyond CMS’ oversight and place even greater accountability on RACs for the accuracy of their audits and determinations under the permanent program.

McGuireWoods White Paper Available - RAC: A Primer on RAC Appeals

Members of the McGuireWoods RAC Response Team recently authored a primer on RAC appeals. The article provides a short overview of the RAC demonstration program results related to appeals and provides a useful overview of the RAC appeals process. Once providers receive a demand letter claiming an overpayment, the timeframes for appealing are short and providers need to be prepared to proceed through the appeals process if a solid basis for such appeal exists. The RAC appeals process mirrors the five-level Medicare claims appeals process through which fee-for-service providers appeal payment decisions and the article walks providers through the requirements of each level. This white paper will be made available on this listserve and you can request a copy by emailing Elissa Moore at emoore@mcguirewoods.com.

If you have any questions regarding RACs, or RAC determination appeals, please contact the authors, members of the McGuireWoods RAC Response Team.

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