CMS soon will pay a new private corporation bounties for spotting and recovering Medicare overpayments. The federal Medicare agency will expand its recovery auditor (RAC) program in 2014, adding a fifth RAC that will have jurisdiction nationwide and only over home health, hospice and DME audit targets.
 
Meanwhile, the four existing RACs, which have limited jurisdiction by state, will focus exclusively on Medicare Part A and Part B audits.
 
These changes will take place once new contracts are in place for all five RACs; the current crop of contracts expires in February 2014.
 
CMS has not yet formally announced this reconfiguration of the RAC program, but the changes are described in detail in two scope-of-work (SOW) documents unearthed by RACMonitor.com, an online news source that covers Medicare audit agencies.
 
It’s not all bad news, however; the SOW documents also reduce the amount of time RACs have to perform complex reviews, which involve humans looking at charts and notes, from 60 days to 30 days. RACs that go over 30 days won’t get paid a contingency fee for that review. Also, CMS is demanding that RACs help CMS defend against provider appeals of their overpayments for 25% of all appeals that reach the administrative law judge level.
 
It seems that the backlash against RACs from various provider groups are having some effect, as CMS is feeling pressure from Congress to rein in the RACs – even as they add a fifth contractor into the mix.
 
CMS officials had not yet responded to requests for comment, but watch upcoming issues of HHL for more information.