The U.S. Court of Federal Claims has granted a stay of new Recovery Audit Contractor (RAC) contracts until the appeals process has been exhausted in the lawsuit filed in May by CGI Federal against the U.S. Department of Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS). With this stay, it is anticipated that new contracts will not be awarded until late 2015, and won’t begin until 2016, at the earliest.
CGI, the Region B RAC, filed the complaint, claiming that CMS’ plans to award new RAC contracts would be “arbitrary and capricious.” The lawsuit also seeks to eliminate CMS’ new payment terms that prohibit RACs from being paid until after the second level of appeal, according to several sources.
The lawsuit encompasses RAC regions 1, 2, and 4. Although RAC regions 3 and 5 are not part of the suit, an article in RacMonitor suggests that it is “highly unlikely” that CMS would award contracts in those regions either while litigation is pending.