RAC Audits, also known as Medicaid
Medicaid
Medicaid in the United States is a federal and state program that helps with medical costs for some people with limited income and resources. Medicaid also offers benefits not normally covered by Medicare, including nursing home care and personal care services. The Health Insurance As…
What are RAC audits?
Nov 16, 2021 · Medicare Recovery Audit Contractor Audits (RACs, or RAs) were introduced beginning in 2005 to identify and recover improper payments made in Medicare and Medicaid transactions between providers and payors. They were (and are) conducted by Recovery Audit Contractors (also known as RACs).
What Medicare claims do RACS review?
Apr 13, 2021 · What is a RAC Audit? RAC audits are run by the Centers for Medicare and Medicaid Services (CMS). Their goal is to uncover improper Medicaid and Medicare claim payments and get the money back. RAC auditors have collected back over $2 billion for CMS.
What is the Medicare Recovery Audit Contractor program?
RAC Audits, also known as Medicaid Audits, Medicare Audits, MAC Audits, or MIC Audits are ongoing, aggressive, intrusive programs with the sole purpose of recovering reimbursement from health care providers. These audits are expected to become more frequent for the foreseeable future. Whatever type of audit is conducted, they pose a serious threat to your …
What is a Medicare Mac audit?
Jul 20, 2021 · What is a RAC audit in Medicare? The word audit strikes fear into the calmest of hearts. It can come from the IRS, your employer, or if you run a Hospice or home healthcare business, you may have an audit from the Centers for Medicare & Medicaid Services that is performed by a Recovery Audit Contractor.
What are RAC audits looking for?
They look for improper payments RAC looks for both overpayments made to patients and underpayments made to providers. While many RAC audits do uncover fraud, it is important to note that innocent mistakes or errors in documentation can also trigger an audit.Nov 29, 2016
What triggers a RAC audit?
RAC audits are not one-time or intermittent reviews and can be triggered by anything from an innocent documentation error to outright fraud. They are part of a systematic and concurrent operating process that ensures compliance with Medicare's clinical payment criteria, documentation and billing requirements.
How do I prepare for a RAC audit?
Here are five ways you can prepare.Perform an Internal Audit. This action will help you to determine the likelihood of coding and billing mistakes within your company.Identify and Correct Coding/Billing Issues. ... Review Problem Areas. ... Check Documentation. ... Find Assistance.Mar 31, 2021
What are the two types of Medicare audits?
Types of Medicare AuditsRecovery Audit Contractor (RAC) Audits.The Certified Error Rate Testing (CERT) Audits.Probe Audits.Check the address on the letter and ensure that it is the address of your practice.Make contact with the auditors.Keep copies of all transmitted documents to the auditors.More items...
How far back can Medicare audit go?
three yearsMedicare RACs perform audit and recovery activities on a postpayment basis, and claims are reviewable up to three years from the date the claim was filed.Nov 1, 2015
What triggers a Medicare audit?
What Triggers a Medicare Audit? A key factor that often triggers an audit is claiming reimbursement for a higher than usual frequency of services over a period of time compared to other health professionals who provide similar services.
What is a RAC review?
RAC Review Process RACs review claims on a post-payment basis and will be able to look back three years from the date the claim was paid. There are two main types of review - automated (no medical record required) and complex (medical record required).
How can we avoid RAC audit?
6 Critical Tips to Avoid RAC AuditsHave a Risk-Management Plan in Place. ... Use Task and Employee Performance Checklists. ... Pay Attention to EHR Templates and Software Up-Coding. ... Avoid the Overuse of Levels 4 and 5 in E/M Codes. ... Control Errors and Expenses with an Independent Audit.More items...•Mar 6, 2018
How are RACs paid for their services?
RACs are paid on a contingency fee basis, which means they are reimbursed based on a percentage of the improper payments they find or collect. The amount of the contingency fee is based on the amount of money from, or reimbursed to, providers.
What happens when you get audited by Medicare?
Medicare audits are one of several things that can trigger a larger civil or criminal investigation by federal law enforcement. Usually, auditors con- clude that Medicare has made significant “over- payments”and demand that the audited physician return the money.
What happens if you fail a Medicare audit?
If you fail to comply with the request, you will not receive reimbursement for the submitted claims. Even if you comply but the documentation doesn't support what you billed for, you won't get reimbursement.Jan 6, 2015
Why do CMS and RAC auditors have the right to access your medical records?
RAC auditors will usually request medical records to complete the audit. For example, they may request medical records that detail a more complex procedure to ensure you were paid correctly for the services you provided.Apr 13, 2021
Introduction: What is a RAC Audit?
Medicare Recovery Audit Contractor Audits (RACs, or RAs) were introduced beginning in 2005 to identify and recover improper payments made in Medicare and Medicaid transactions between providers and payors. They were (and are) conducted by Recovery Audit Contractors (also known as RACs).
Chapter One: History of Recovery Audits
RAC audits were introduced in 2005, peaked around 2010 and experienced a slowdown from that point on. To understand the role of RAC audits in today’s healthcare finance space, it’s important to know how they started and why they have diminished.
Chapter Two: Types of RAC Audits
Before we look at the specific types of Recovery Audit Contractor audits, let’s review where they lie in the overall audit landscape.
Chapter Three: RAC Audit FAQ
With so many levels and types, it’s clear that audits can be complex. Adding in government legislation doesn’t necessarily make the process easier. The following frequently asked questions can provide additional clarity on the why and how of RAC audits.
Chapter Four: The Audit Process
The timing of an audit is dependent entirely upon the payor. If a RAC auditor wishes to conduct an audit, the provider must comply. Once an audit begins, the initial response process is largely the same regardless of whether it was triggered by a RAC auditor, commercial payor or other audit contractors.
Chapter Five: What Can You Do To Improve Your RAC Audit Process?
Before the ADR even arrives on your doorstep, you can take steps to train your team and implement processes designed to simplify your response process.
Chapter Six: Technology as an Audit Management Solution
When RAC audits were introduced, providers received an unmanageable volume of audit requests from payors. Now, changes in Recovery Audits have led to fewer audits and less paperwork, giving hospitals the opportunity to focus more broadly on all types of payor audits.
What does RAC audit notification mean?
If your practice receives a RAC audit notification letter, it’s generally to investigate suspicion of an improper payment on a claim (either an overpayment or an underpayment). RAC auditors will usually request medical records to complete the audit.
How long does it take for RAC to determine if you have overpaid?
Once you submit the requested medical records, the RAC has 60 days to get a determination to you. If all goes well, this could be the end of the audit. If the RAC determines you received an overpayment, the process will continue, and you could be required to pay the money back.
How long does it take to get an overpayment letter from the RAC?
After receiving a demand letter, you are required to call the RAC within 15 days to discuss how you plan to proceed. In response to an overpayment demand letter, you essentially have three options:
How long do you have to respond to a RAC request?
If you receive a letter from a RAC contractor requesting medical records, don’t delay. You have 45 calendar days to either submit a response or file an extension. If you don’t respond at all, the RAC could simply make a determination that you were overpaid, and take their money back.
How long does it take to get a Medicare recoupment determination?
Level 1: The first appeal level is redetermination. You have 120 days to file the first appeal but if you get it in within 30 days you can avoid Medicare recoupment action. You should get a determination within 60 days of receipt of your redetermination request. Level 2: The second appeal level is reconsideration.
What is RAC audit?
What is a RAC Audit? RAC Audits, also known as Medicaid Audits, Medicare Audits, MAC Audits, or MIC Audits are ongoing, aggressive, intrusive programs with the sole purpose of recovering reimbursement from health care providers. These audits are expected to become more frequent for the foreseeable future.
What is auditing a serious threat?
Whatever type of audit is conducted, they pose a serious threat to your practice, finances, and reputation. These federally empowered auditing initiatives were set up to take back reimbursement from you and your practice.
Is Medicare a burden of compliance?
Compliance. The burden of compliance is the responsibility of healthcare providers. Outside of basic written guidelines, Medicare will not provide any specific guidance to the physician or provider. Internal changes for practices should be established to monitor documentation and coding for compliance as well as establishing a framework ...
What are the two types of Medicare RAC audits?
Types of RAC Audits. Generally, there are two types of Medicare RAC audits – the automated audits and complex audits.
What is RAC audit?
What Are Recovery Audit Contractor (RAC) Audits? Also known as a Medicare audit or a MAC audit, the Recovery Audits Contract (RAC) program is an aggressive campaign seeking reimbursement from healthcare service providers. These audits have become increasingly frequent over the past few years, and they will continue to for the foreseeable future.
What is Medicare Recovery Audit Contractor?
These include services that are deemed “not reasonably necessary.”
What to do if you are subject to a RAC audit?
If you are subject to a RAC audit, make sure to make an informed decision selecting an attorney. You’ll need an experienced team well versed in this subject to effectively refute fraud claims, especially in complex RAC audits.
Is CMS still enforcing Medicare RAC audits?
All in all, the CMS is expected to continue enforcing standards for payments and Medicare RAC audits. Healthcare service providers will also be looking to minimize the risk that the Medicare recovery audit contractor program can have on them, both from a financial and reputational perspective.
What is RAC audit?
This shows the Cent ers for Medicare & Medicaid Services (CMS) believe RAC audits are a cost-effective method to ensure health care providers are paid correctly and thereby protect the Medicare Trust Fund. RAC audits are highly complex and require significant manpower to handle the large volume of requests received during a short period of time. Additionally, the RAC audit appeal process is complicated and requires a high level of technical expertise. The demonstration project found that RAC audits resulted in sizeable amounts of overpayments collected ("take-backs") from many providers. This research study assesses the potential impact of the RAC audit program on US acute care hospitals. Data obtained from CMS show that RAC overpayments collected for FY 2010 were $75.4 million, increased to $797.4 million in FY 2011, and increased to $986.2 million in the first six months of FY 2012. According to the American Hospital Association (AHA) RACTrac audit survey, the vast majority of these collections represent complex denials where hospitals are required to provide medical record documents in support of their billed claims. This study found that the RAC audit program collections are increasing significantly over time. As a result, these collections are having a significant negative impact on the profitability of US hospitals.
How complex is RAC audit?
RAC audits are highly complex and require significant manpower to handle the large volume of requests received during a short period of time. Additionally, the RAC audit appeal process is complicated and requires a high level of technical expertise.
What Are Recovery Audit Contractor (RAC) Audits?
- Also known as a Medicare audit or a MAC audit, the Recovery Audits Contract (RAC)program is an aggressive campaign seeking reimbursement from healthcare service providers. These audits have become increasingly frequent over the past few years, and they will continue to for the foreseeable future. Whenever a healthcare facility gets hit with a Recov...
A Quick History
- The Medicare Recovery Audit Contractor program started in 2005 and was created as part of the Medicare Integrity Program from the Centers for Medicare and Medicaid Services (CMS). The objective of this program is to discover any improper payments that are charged for uncovered services. These include services that are deemed “not reasonably necessary.” The RAC audits al…
Remediation and Protection Procedures
- These days, healthcare service providers have become increasingly concerned about Medicare RAC audits. It’s easy to see why. Some hospitals have millions of dollars’ worth of claims, and all of these could suddenly go under appeal at any second. Hospitals already face having to reduce profit margins due to low reimbursement rates and higher costs. An RAC audit could have devas…
Compliance
- Medicare already has specific guidance in place for every healthcare provider and physician. Outside of that, it won’t provide any more guidance. To keep yourself in the best position possible, your practice needs to have a system that monitors coding and documentation for compliance. You will also need to have an effective framework for keeping track of all RAC requests. Of cour…
RAC Fees
- The fees for RAC audits are generally based on contingency, as explained earlier. This provides an additional incentive for auditors to find errors. Note that while these fees are contingency-based, they will depend on contract negotiations directly with the CMS. The fee structure generally follows: Region A:12.45% States:Connecticut, Delaware, District of Columbia, Maine, Maryland, …
Conclusion
- If you are subject to a RAC audit, make sure to make an informed decision selecting an attorney. You’ll need an experienced team well versed in this subject to effectively refute fraud claims, especially in complex RAC audits.