“RAC” Audit

Can you please explain what a “RAC” audit is?Can you please explain what a “RAC” audit is?

Recovery Audit Contractor (RAC) Audits

•      • 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.
  •           ○ First, the RAC identifies a risk pool of claims.
  •           ○ Second, the RAC requests medical records from the provider.    
  •           ○ Once the records are received by the RAC, they will review the claim and medical records. Based on the review, the RAC will make a determination: overpayment, underpayment or correct payment.
  •            ○ RACs are able to look back three years from the dates the claim was paid.
•      • A Recovery Audit Contractor (RAC) is a third-party entity working on behalf of the United States government Centers for Medicare and Medicaid Services to identify and recover improper payments made in Medicare transactions between providers and payors.
•      • 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 the difference between CERT audit and RAC audit?
  •           ○ Whereas CERT focuses on mistakes made by carriers, Recovery Audit Contractors (RAC) focus on errors created by providers. The primary purpose of RAC is to detect and correct improper payments so that CMS/ MACs can institute changes to prevent future improper payments.
•      • Who conducts RAC audits?
  •           ○ The Centers for Medicare and Medicaid Services (CMS) contracts with private companies who conduct RAC audits.

A RAC audit can be a very unpleasant experience if the documentation for the dates of service in question do not specifically and accurately support the coding and the billing that was submitted for the dates of service in question.

This is my opinion.

Michael G. Warshaw

DPM, CPC

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