Medicaid Recovery Audit Contractor (RAC) Final Rule

CMS released the Medicaid Recovery Audit Contractor (RAC) final rule on September 14, 2011. In January, the AMA and 80 state and specialty societies submitted comments to CMS on the Medicaid RAC proposed rule.  The AMA is currently reviewing the final rule, but our initial read is that the rule adopts many of our specific recommendations, including: 1) a 3-year maximum claims look back period; 2) RACs are required to employ a full-time physician Medical Director; 3) States must set limits on the number and frequency of medical record requests; 4) RACs must hire certified coders; 5) RACs must provide outreach and notify providers of audit policies and protocols; 6) RACs must accept submission of electronic medical records by fax or CD/DVD; 7) RACs cannot audit claims that have already been audited or are currently being audited by another entity; 8) RACs must return the contingency fee if an overpayment determination is reversed at any level of appeal; 9) States must adequately incentivize the identification of underpayments; and, 10) States must coordinate the efforts of the RACs with other auditing entities.  The final rule sets an implementation deadline of January 1, 2012. 
 

The final rule is available at  http://www.ofr.gov/OFRUpload/OFRData/2011-23695_PI.pdf

The comment letter submitted by the AMA and 80 state and specialty societies is available at  http://www.ama-assn.org/ama1/pub/upload/mm/399/rac-letter-10jan2011.pdf