Medicare RAC audits to resume

Just in case you didn't get the memo earlier this week, hospitals should take note that the Centers for Medicare & Medicaid Services will soon allow Recovery Auditors (RACs) to restart some reviews.

The message on the CMS website was concise:

Due to the continued delay in awarding new Recovery Auditor contracts, the CMS is initiating contract modifications to the current Recovery Auditor contracts to allow the Recovery Auditors to restart some reviews. Most reviews will be done on an automated basis, but a limited number will be complex reviews of topics selected by CMS.

Work continues on the procurement process for the four Part A / Part B Regions and the national DMEPOS/HH&H Region. The CMS remains hopeful that the new round of Recovery Auditor contracts will be awarded this year.

An email message to Congressional staff from CMS' Lauren Aronson was slightly more specific, indicating that RACs would “conduct a limited number of automated reviews and a small number of complex reviews on certain claims including, but not limited to: spinal fusions, outpatient therapy services, durable medical equipment, prosthetics, orthotics and supplies, and cosmetic procedures.” She also affirmed that RACs would not conduct inpatient hospital patient status reviews during the restart period.

CMS had announced a “pause” in RAC audits in the spring of this year, in preparation for the procurement of the next round of RAC contracts. June 1 was the last date a Recovery Auditor was permitted to send improper payment files to the MACs for adjustment. The Recovery Auditor "contract modifications," which CMS referenced in their message, will be effective with the next RAC program contract awards, and include:

• RACs must wait 30 days to allow for a discussion before sending the claim to the MAC for adjustment. Providers will not have to choose between initiating a discussion and an appeal.
• RACs must confirm receipt of a discussion request within three days.
• RACs must wait until the second level of appeal is exhausted before they receive their contingency fee.
• CMS is establishing revised ADR limits that will be diversified across different claim types (e.g., inpatient, outpatient).
• RACs will be required to adjust the ADR limits in accordance with a provider’s denial rate (providers with low denial rates will have lower ADR limits while providers with high denial rates will have higher ADR limits).