Recovery Audit Contractors May Be Going Nationwide Earlier Than Expected

Officials from the Centers for Medicare and Medicaid Services (CMS) stated at a March meeting of the Practicing Physicians Advisory Council (PPAC) that Recovery Audit Contractors (RACs) could be nationwide as early as March 2008. The Tax Relief and Healthcare Act of 2006 requires that the program operate in all 50 states by 2010. RAC is a Medicare auditing program that utilizes private firms to examine physician, hospital, nursing home, and other claims to find instances in which the government has overpaid or underpaid providers. Currently, RACs only operate in California, New York, and Florida as part of a pilot study.

According to its Web site, CMS plans to have four RACs in place with each one being responsible for identifying overpayments and underpayments in approximately one-quarter of the country. These jurisdictions will be identical to the Durable Medical Equipment Medicare Administrative Contractors (DME MACs) and divided as follows:

• Jurisdiction A: CT, DE, DC, ME, MD, MA, NH, NJ, NY, PA, RI, and VT;

• Jurisdiction B: IL, IN, KY, MI, MN, OH, WI;

• Jurisdiction C: AL, AR, CO, FL, GA, LA, MS, NM, NC, OK, Puerto Rico, SC, TN, TX, U.S. Virgin Islands, VA, WV; and

• Jurisdiction D: AK, American Samoa, AZ, CA, Guam, HI, ID, IA, KS, MO, MN, NE, NV, ND, Northern Mariana Islands, OR, SD, UT, WA, WY.

CMS plans to add one or two states to the 3 current jurisdictions this spring and has already released a Request for Information (RFI) for the fully expanded program’s draft Statement of Work (SOW). The draft SOW, in part, indicates that all RACs must employ a minimum of one full time contractor medical director who must be either an MD or DO. It also outlines which types of payments are excluded from review by the RACs, such as incorrectly coded Evaluation and Management (E/M) services.

Full copies of the RFI and SOW can be obtained here.