Medicaid RAC final rule concedes to providers

A new Recovery Audit Contractor (RAC) program for Medicaid will launch early next year, and will include some changes lobbied for by medical groups, reports American Medical News.

The Medicaid RAC program will function similarly to the RAC program for Medicare. Outside contractors will make examinations of past claims, looking for those that may have been fraudulent and wasteful, and put the onus on providers to dispute them or make repayments.

However, in the final rules for the Medicaid RAC program released by the Centers for Medicare & Medicaid Services (CMS) on Sept. 14, significant changes were made. Each Medicare RAC must hire a physician as a medical director and requires only the hiring of "trained medical professionals" to review medical claims. Restrictions were also placed on the frequency and age of claims that can be requested by RACs for review.

CMS "very much stressed the need for coordination and recognized the burden it does pose on providers," said Xiaoyi Huang, assistant vice president for policy at the National Association of Public Hospitals and Health Systems.

However, some lobbying groups still expressed concern that the RAC payment system creates a perverse incentive to dig into claims.

For more information:
- read the American Medical News article
- check out the CMS final rule (.pdf)