How Does the Medicare RAC process work?
How Does the Medicare RAC process work?
If you are a Medicare fee for service provider, you may have heard of the RACs by now. A RAC is a Recovery Audit Contractor, authorized by Medicare to audit any and all fee for service providers for improper payments. There are four RACs, each responsible for a region of the country. They are separate from your local Medicare carrier, so do not confuse a RAC audit with an audit from your local carrier. They are two separate entities. If you receive a letter from a RAC notifying you that you are being audited, it will be on their letterhead, not your local carrier’s.
RACs review Medicare claims filed by providers on a post-payment basis. There is a three year look back period, so they cannot review anyclaims older than October 2007. The Centers for Medicare and Medicaid Services authorize which issues the RACs are allowed to audit, and these approved issues are required to be posted to the RACs website as public knowledge. So at any time, a provider may check their region’s RAC website and see if any services they provide have been approved for audit.
The auditors use the same Medicare polices as carriers, FIs and MACs. They are subject to all NCDs, LCDs, and CMS Manuals. Each RecoveryAudit Contractor is also required to employ a staff consisting of nurses, therapists, certified coders, and a physician CMD.
There are two types of review: Automated, in which no medical record will be needed from you. The RAC reviews these claims by an automatedcomputer algorithm. You should be able to identify at which point you have been audited by the automated process. A remittance advice will be issued with the remark code N432: Adjustment based on Recovery Audit. Your local carrier recoups the overpayment by offset on future claims payments unless you submit a check or a valid appeal.
The second type of review is complex. This is where you will be contacted with a request to send in medical records for the claims under review. There is a limit to the number of files that the contractor can request every 45 days.
Jeff Roh owns a physician billing service which specializes in increasing healthcare providers’ revenue and cash-flow. For more information, visit http://www.profastbilling.com.
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