Recovery Audit Contractors (RACs)
The Recovery Audit Contractor (RAC) program is responsible for identifying Medicare payment errors in each of four regional jurisdictions which match Durable Medical Equipment (DME) regional jurisdictions. The RACs are paid a contingency fee, based on the amount of improper payments that they are able to correct. RACs need to return their contingency fee if a case is later overturned.1 The RAC contractors and their contact information are as follows:
- Region A — Northeast: Diversified Collection Services, Inc., 1-866-201-0580
- Region B — Midwest: CGI Technologies and Solutions, Inc., 1-877-316-7222
- Region C — South Central and Southeast: Connolly Consulting Associates, Inc.,
1-866-360-2507 - Region D — West and Northwest: HealthDataInsights, 1-866-590-5598 for Part A
and 1-866-376-2319 for Part B2
Key goals of the RAC program are to detect and correct past improper payments and to implement changes to prevent future payment mistakes. RACs are required to post CMS-approved audit issues on a Web site prior to initiating review. Audit issues can be either automated or complex. An automated review involves retrospective claims audit to look for things such as billing an inappropriate number of units for a product or a service. A complex review involves manual examination of documentation to determine compliance with local or national coverage policies or medical necessity. Providers undergoing a complex review may be required to submit additional documentation requested by the RAC or the RAC subcontractors. Additional documentation requests are limited to a set number within a 45-day period, based upon the provider type and the size of practice/group.3
There are three main options for addressing an overpayment determination from a RAC:
- A discussion period is available within the first 40 days upon receipt of the overpayment demand letter and offers Medicare providers an opportunity to supply additional information to the RAC regarding why the recoupment should not be initiated. The RAC will re-evaluate additional information and submit a letter to the provider detailing the outcome.
- A rebuttal opportunity is available for 15 days or after the issuance of an overpayment demand letter. This offers providers an opportunity to produce a statement and evidence indicating how the overpayment action will cause a financial hardship to the practice and why it should not take place.
- Redetermination is the first level of appeal and is available within the first 120 days of the issuance of the overpayment demand letter. However, such a request must be filed within 30 days to prevent the overpayment amount from being deducted from payments at day 41.4
1 CMS. Available at www.cms.gov/RAC. Accessed Dec. 7, 2010.
2 CMS. "RAC Contact Information." Available at www.cms.gov. Accessed Dec. 7, 2010.
3 CMS. Available at www.cms.gov/RAC. Accessed Dec. 7, 2010.
4 CMS. "Provider Options: RAC Overpayment Determination Chart." Available at www.cms.gov/RAC. Accessed Dec. 7, 2010.
Coverage policies may vary by insurer or even between plans offered by the same insurer. This information is presented for informational purposes only and is not intended to provide reimbursement or legal advice. Laws, regulations, and policies concerning reimbursement are complex and are updated frequently. While we have made an effort to be current, the information may not be as current or comprehensive when you view it. Please consult with your counsel or reimbursement specialist for any reimbursement or billing questions.