Full Answer
What is a Medicare 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 a Recovery Audit Contractor (RAC)?
What does a Recovery Audit Contractor (RAC) do? RAC's review claims on a post-payment basis. The RAC's detect and correct past improper payments so that CMS and Carriers, FIs, and MACs can implement actions that will prevent future improper payments. Who are Recovery Audit Contractors?
What is the Medicare Part D RAC?
The Part D RAC employs a model similar to the one used in the Medicare Parts A and B RAC program to audit Part D plan sponsors. The Part D RAC: Reviews previously paid individual Medicare claims (prescription drug events) to sponsoring organizations and pharmacies to determine overpayment and underpayment
What happens after I submit my medical records to the RAC?
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. Tip: Conduct an internal audit on the same records being requested.
What is the lookback period for overpayments?
within six yearsThe rule also states that an overpayment must be reported and returned if it is identified within six years of the date it was received. This time period is generally referred to as the “lookback” period.
How far back can Medicare RAC audits 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.
What is a Medicare RAC review?
What does a Recovery Audit Contractor (RAC) do? RAC's review claims on a post-payment basis. The RAC's detect and correct past improper payments so that CMS and Carriers, FIs, and MACs can implement actions that will prevent future improper payments.
How far back can Medicare go to recoup payments?
(1) Medicare contractors can begin recoupment no earlier than 41 days from the date of the initial overpayment demand but shall cease recoupment of the overpayment in question, upon receipt of a timely and valid request for a redetermination of an overpayment.
When did RAC audits start?
2005Part D RAC Program History In 2005, CMS implemented the Medicare Recovery Audit Contractor (RAC) Program as a demonstration program for Medicare fee-for-service (FFS); Medicare Parts A and Part B. The pilot program successfully corrected more than $1.03 Billion in Medicare improper payments.
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 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 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...
Can RAC audits be appealed?
All providers may appeal the initial determination made by the Recovery Audit Contractors, either informally or formally. The informal process involves appealing directly to the contractor within 15 days of receiving a notice to recoup an overpayment from the RAC.
Does Medicare have a statute of limitations?
FEDERAL STATUTE OF LIMITATIONS For Medicaid and Medicare fraud, federal law establishes (1) a civil statute of limitations of six years (42 U.S.C. § 1320a-7a(c)(1)), and (2) a criminal statute of limitations of five years (18 U.S.C. § 3282).
What is the standard time frame established for record retention?
Appendix A: Federal Record Retention Requirements. Maintain for three years. As determined by the respective state statute, or the statute of limitations in the state.
What is Medicare recoupment?
Request Immediate Recoupment: Occurs when Medicare recovers an overpayment by offsetting future payments. Your MAC may recoup a partial payment (for example, a percentage of payments recouped) or a complete recoupment.
How long does Medicare Part D RAC take?
The Medicare Part D RAC will allow the plan sponsor a period of 60 or 90 days (90 days if prescriptions are requested) to provide additional information to refute all or some of the RAC’s findings. The RAC will not factor into the improper payment calculation any documentation it receives after this timeframe, and the RAC will render a decision based only on the data and the PDE records that plan sponsors submit during the appropriate timeframe. Once the RAC finalizes a decision and the DVC validates and concurs with this decision, plan sponsors will receive a Notification of Improper Payment (NIP).
What is the first step in RAC audit?
Step 1: The RAC Obtains Audit Scope and Documentation. CMS/CPI determines the specific criteria on which the Part D RAC must review audit packages. To direct the RAC's review, CMS/CPI mandates review of files that fall within a particular year and contract for a particular plan.
What does the DVC need to validate RAC findings?
Further, the DVC must validate the RAC's improper payment findings before the RAC is permitted to actively pursue overpayments from sponsors.
What is a DVC in Medicare?
The DVC is an independent reviewer to protect the integrity of the Medicare Part D RAC program and ensure that improper payment determinations are accurate and unbiased before issuing the NIPs to plan sponsors. The DVC is also responsible for measuring the Part D RAC’s accuracy rate on CMS’ behalf.
Do RACs get paid?
RACs are paid on a contingency basis. They only collect payment improper payments recovered by CMS. Sponsors may appeal RAC findings (see the Part D RAC Appeals section). Should a sponsor appeal a RAC finding, the RAC will not receive payment until the appeal process has been completed and the audit finding upheld.
Can the RAC accept the DVC?
The RAC may either accept or reject the DVC's analysis findings. If rejected, the DVC must collaborate with the RAC to attempt resolution. CMS is the final decision maker to resolve disagreements on improper payment findings between the Medicare Part D DVC and RAC. Further, the DVC must validate the RAC's improper payment findings before ...
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 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.
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 is Medicare retroactive?
The Medicare website mentions the 6 months of retroactive coverage but is very vague as to how it applies. The answer is Medicare coverage can be retroactive up to 6 months, if you sign up after your 65th birthday. The rule is if you sign up after turning 65, the Medicare coverage will be retroactive to the lessor of 1) the first day of your birthday month or 2) 6 months. Of course the government makes such a cockamamie rule, but oh well. Here are some examples for someone whose birthday is March 30th: 1 Medicare starts June 1st – retroactive coverage until March 1st (birthday month) 2 Medicare starts September 1st – retroactive coverage until March 1st (birthday month) 3 Medicare starts December 1st – retroactive coverage until June 1st (6 months)
How long after a HSA is disqualified can you be retroactively disqualified?
In essence, you can be following the rules as an HSA eligible individual, and 6 months after the fact be retroactively disqualified (made HSA ineligible) due to Medicare Part A. If you are familiar at all with how HSA tax Form 8889 works, you know that this can pose some serious risks to your financial well being.
How long does Medicare coverage last after 65?
It states that if you sign up for Medicare Part A after you turn 65, the coverage will retroactively be applied up to 6 months into the past.
When did Paul get Medicare Part A?
Because Paul was 67 when he signed up for Medicare Part A on May 1st, 2017, the coverage retroactively applied 6 months prior to November 1st, 2016. This means that he was not HSA eligible from November 2016 – April 2017.
When does Medicare Part A coverage go into effect?
1) The first day of the month you turn 65. 2) The month before you turn 65 (if your birthday is on the 1st of the month). After turning 65, you’re coverage will be in effect (retroactively) the lessor of 1) 6 months or 2) your 65th birthday. It is that last clause that can really affect HSA holders. It states that if you sign up for Medicare Part A ...
Can Medicare Part A be retroactive?
Given the fact that Medicare Part A can retroactively disqualify you from being HSA eligible , it is best to prepare for such an event and plan accordingly. This involves a combination of 1) knowing if you are at risk for retroactive coverage and 2) planning your preceding and current HSA actions appropriately.
Does Medicare Part A end HSA?
While this not only ends your HSA eligibility (see next section), it may affect your HSA eligibility in previous months.
How many extensions of time triggers are there for Medicare?
If the beneficiary and the provider or supplier is notified on different days about the beneficiary’s retroactive Medicare entitlement, there will be two extensions of time triggers. One extension of time trigger is when the beneficiary is first notified about the beneficiary’s retroactive Medicare entitlement and the other extension ...
Can a provider furnish services to an individual who was not entitled to Medicare?
Thus, a provider or supplier may have furnished services to an individual who was not entitled to Medicare. More than a year later, the individual receives notification from SSA that he or she is entitled to Medicare benefits retroactive to or before the date he or she received services from the provider or supplier.