Recovery Audit Contractors: Identifying Improper Medicare Payments
In an effort to identify improper Medicare payments and fight fraud, waste and abuse in the Medicare program, The Centers for Medicare & Medicaid Services ("CMS") awarded contracts to four permanent Recovery Audit Contractors ("RAC's"). The national RAC program is the outgrowth of a successful demonstration program that used RAC's to identify Medicare overpayments and underpayments to health care providers and suppliers in
- Overpayments can occur when health care providers submit claims that do not meet Medicare’s coding or medical necessity policies.
- Underpayments can occur when health care providers submit claims for a simple procedure but the medical record reveals that a more complicated procedure was actually performed.
Health care providers that will be reviewed for overpayments and underpayments include: hospitals, physician practices, nursing homes, home health agencies, durable medical equipment suppliers, and any other provider or supplier that bills Medicare Parts A and B.
On October 6, 2008, CMS announced the names of the new national RACs. The new RACs are:
- Diversified Collection Services, in Region A, initially working in Maine, New Hampshire, Vermont, Massachusetts, Rhode Island and New York.
- CGI Technologies and Solutions, in Region B, initially working in Michigan, Indiana and Minnesota.
- Connolly Consulting Associates, in Region C, initially working in South Carolina, Florida, Colorado and New Mexico.
- HealthDataInsights, in Region D, initially working in Montana, Wyoming, North Dakota, South Dakota, Utah and Arizona.
Additional states will be added to each RAC region in 2009.
The RACs will be paid on a contingency fee basis on both the overpayments and underpayments they find. Contingency Fees are as follows:
- Region A - 12.45%
- Region B - 12.50%
- Region C - 9.00%
- Region D - 9.49%
