On September 16, the Centers for Medicare & Medicaid Services (CMS) published the final rule in the Federal Register which implements the Medicaid Recovery Audit Contractor (RAC) program, as required by § 6411 of the Patient Protection and Affordable Care Act (PPACA). The original April 1, 2011, implementation date was delayed in part to ensure states would be able to comply with the provisions of the final rule. The final rule requires implementation by January 1, 2012.
CMS estimates that the Medicaid RAC program will result in net savings to the Medicaid program of $110 million in fiscal year (FY) 2012, $330 million in FY 2013, $480 million in 2014, $580 million in 2015, and $630 in FY 2016.
The final rule addresses many of the provisions included in the proposed rule released on November 10, 2010. For example, states may contract with one or more RACs, and states are not required to adopt new administrative review processes to accommodate the RACs. While the final rule provides for some standardization, many of the elements of the Medicaid RAC program remain under the purview of the states. The following are some highlights from the final rule:
Education and Outreach. RACs must work with states to develop educational and outreach programs that include notification of audit policies and audit protocols.
Look-Back Period. RACs are limited to a three-year maximum claims look-back period.
Limits on Medical Record Requests. States will establish the limits on the number and frequency of medical records requested by a RAC. However, RACS are required to accept submissions of electronic medical records on CD/DVD or via fax at the provider’s request.
Preventing Overlap. RACs should not audit claims that have already been reviewed or are currently under review by another entity. However, under certain limited instances, overlapping audits may be necessary or otherwise unavoidable, and the states and RACS must coordinate auditing efforts with those other entities.
RAC Staffing Requirements. RACs must hire a full-time contractor medical director who is a doctor of medicine (MD) or doctor of osteopathy(DO) in good standing and who has relevant work and educational experience, as well as certified coders, unless the state determines that coders are not required.
Reporting Fraud. States, not RACs, have the responsibility to make timely referrals of suspected fraud to the State Medicaid Fraud Control Unit or other appropriate law enforcement agency.
Deadlines. RACs must notify providers of overpayment findings within 60 calendar days.
Appeals. States are required to have an adequate appeals process for adverse Medicaid RAC decisions; however, the final rule notes that states maintain complete flexibility regarding the design and administration of such appeals processes.
The Medicaid RAC Statement of Work (SOW) for the Recovery Audit Program is also available for viewing.
