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CMS Presses Pause on RAC Reviews

On February 18, 2014, the Centers for Medicare and Medicaid Services (CMS) announced that it had suspended the ability of Recovery Audit Contractors (RAC) to request documents for claims reviews until CMS has had an opportunity to finish the procurement process for new RAC contracts. Under the Recovery Audit Program, RACs are charged with identifying improper Medicare payments. The Program has long been a source of controversy, in part because RACs are paid a contingent fee based on a percentage of claims they deny. Currently, this fee ranges from 9% to 12.5%.

CMS has indicated that it is in the procurement process for the next round of Recovery Audit Program contracts. According to CMS, the pause in operations will allow CMS to continue to refine and improve the Recovery Audit Program. In particular, CMS is reviewing the additional documentation request limits, time frames for review, and communications between recovery auditors and providers.

February 21, 2014 was the last day a RAC could send a post-payment additional documentation request (ADR). June 1, 2014 is the last day a RAC may send improper payment files to a Medicare Administrative Contractor for adjustment.

CMS posted a reminder on its website on March 7, 2014 that RACs can continue to conduct automated reviews through June 1, 2014. Automated reviews do not require the solicitation of medical records from providers. Recovery auditors continue to be required to complete the reviews for the ADRs that they have already sent as of February 28, 2014. Providers have 45 days to respond to an ADR, and recovery auditors have up to 60 days to make a determination on the claim.

If you have any questions about RACs, ZPICs or other audit issues, please do not hesitate to contact Kimber L. Latsha, David C. Marshall or Steven M. Montresor.

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