CMS revises RAC program to increase transparency, oversight

The Centers for Medicare & Medicaid Services will revise its Recovery Audit Contractors (RAC) program to sharpen agency oversight, reduce the burden on providers and increase transparency.

Under the new plan, CMS will restrict the RAC program's window for patient status reviews to six months if the provider submits its claim within three months of the date of service. The changes will be effective with each new contract awarded under the program, beginning with the contract for RAC Region 5 CMS awarded on Dec. 30, 2014 to Connolly LLC for the purpose of identifying improper Medicare payments to home health and hospice agencies and medical device suppliers.

Contracts for Regions 1, 2 and 4 will remain under a "pre-award protest," likely through the summer, while the agency tentatively plans to finalize the Region 3 contract in the near future, according to AHA News Now.

These changes follow a CMS announcement last February of a suspension of all additional document requests for RACs until it obtains all new contracts. "It is important that CMS transition down the current contracts so that the Recovery Auditors can complete all outstanding claim reviews and other processes by the end date of the current contracts," CMS announced last year. "In addition, a pause in operations will allow CMS to continue to refine and improve the Medicare Recovery Audit Program."

A September ruling by the U.S. Court of Federal Claims stayed new contracts in three RAC regions in response to pending litigation among CGI Federal, CMS and the U.S. Department of Health and Human Services, FierceHealthFinance previously reported. "The stay granted by the judge in this case until the appeals process has been exhausted effectively puts the subject matter of when the new RAC contracts will be awarded to rest for a year--at least in our opinion," wrote Emily Evans, a partner at Obsidian Research.

To learn more:
- read the CMS announcement
- here are the RAC changes (.pdf)
- read the AHA News Now article