- CMS is implementing changes to the Recovery Audit Contractor (RAC) program that are intended to hold RACs more accountable and reduce the administrative burden of RAC audits on providers.
- CMS will require RACs to maintain high accuracy and low appeal overturn rates. CMS will also require RACs to audit claims proportional to the types of claims the provider submits.
The Centers for Medicare and Medicaid Services announced changes to the Recovery Audit Contractor (RAC) program that are intended to hold RACs more accountable and reduce the administrative burden of RAC audits on providers.
RACs are able to conduct post-payment reviews of claims and are entitled to keep a portion of improper payments recovered through their audits. The RAC program has been effective at recovering improper payments but their audits impose significant administrative burden on providers.
The announcement highlighted $89 million improper payments identified by RAC audits which translates to $73 million in recoveries in FY 2018. The program has recovered over $10 billion since its inception in 2009.
RACs have traditionally targeted hospital inpatient claims that should have been submitted as outpatient claims. Aggressive audit practices also created a backlog of hundreds of thousands of RAC-audited claims pending before the appeals process.
CMS is trying to hold RACs more accountable for their audit practices. CMS is requiring RACs to maintain a 95 percent accuracy score. CMS is also requiring RACs to maintain an appeals overturn rate of less than 10 percent. RACs that fail to maintain these rates will receive a progressive reduction in the number of claims they are allowed to review.
CMS is also requiring RACs to audit claims proportionately to the types of claims a provider submits. The final rule will also require RACs to improve how they provide updates to providers on audited claims.
CMS also issued a final rule that makes some reforms to the claims appeals process to make it easier for providers. For example, the final rule removes the requirement for the provider to sign appeals request documents. According to CMS, over 240,000 appeals requests are dismissed for lacking signature each year. The final rule takes effect on July 8, 2019.
As always, ADVOCATE will keep you up to date on this and all issues impacting radiology as they become available.
Kirk Reinitz, CPA