Your organization’s billing and coding staff have been well-trained in coding, including the new ICD-10 codes that are on the immediate horizon. You have provided your billing staff with impeccable documentation and notes from patient charts. Your staff has always billed Medicare and Medicaid, if applicable, in a timely manner.
One day, you receive notice from the RAC (Recovery Audit Contractors) that your practice’s medical records are required for a review to determine whether an improper payment has been made. Don’t panic! Understanding the process involved and being well-prepared ahead of time can make an audit a bit easier, if not more palatable.
RAC – a short overview:
According the CMS, the RAC was established by the CMS to identify and correct improper past payments and take the necessary actions to ensure the prevention of future improper payments.
Improper payments include:
- Submitting wrong payment amounts
- Billing for non-covered services, such as those not considered ‘reasonable and necessary’ under the Social Security Act.
- Miscoded services, including DRGs
- Duplication of services
Through the efforts of the RAC, providers can reduce the number of non- Medicare compliant claims, the CMS can reduce error rates, as well as offering more protection for taxpayers and future Medicare beneficiaries.
If a provider bills for fee-for-service programs, those claims are subject to RAC review. A complete expansion schedule can be viewed on the CMS website: www.cms.hhs.gov as well as more detailed information about the RAC program.
What is involved with the RAC review process?
- RAC sends a demand letter to the practice or organization whose claims are under investigation.
- RAC may also offer the provider the chance to discuss how the improper payment was determined.
- All reviews are conducted in consultation with physicians, nurses, coders and other reimbursement professionals to ensure accuracy and fairness.
- All issues under consideration are approved by CMS before a wider review.
- Approved issues are posted on the RAC's website prior to a wider review.
RAC reviews claims that have been previously paid and follows the same Medicare policies as its Carriers. RAC does not review claims paid before October 1, 2007; however, it will look into claims paid back as far as three years.
There are two kinds of reviews:
- Automated – no medical records needed
- Complex – supporting medical records are required
To prepare for the review process, it helps to:
- Conduct an internal audit to verify Medicare compliance
- Identify what corrective measures, if necessary, need to be taken for further compliance
- Check to see what payments were found to be improper by the RACs
- Check the OIG and CERT reports for related improper payments
If you agree with RAC’s findings, you can:
- Send recoupment payment by check
- Allow the CMS to deduct the owed amount from future payments
- Request/ply for an extended payment plan
- File an appeal
What happens if I do not agree with RAC’s findings?
First, do not get the RAC discussion period confused with the appeal process – they are separate and not related.
For additional information including timeframes for appealing, see the CMS website’s PDF:
For assistance with your medical documentation issues, as well as coding, billing and related reimbursement questions, contact M-Scribe Technologies, LLC, a leader in the medical reimbursement solutions field. Their experienced counselors can help your organization or practice successfully navigate reimbursement regulations through knowledge and compliance.
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