RAC Contractors Have Been Authorized to Re-Start Audit Activity


It has been remarkably quiet on the Recovery Audit Contractor (RAC) front for the last 18 months or so. As a result of the original RAC contracts coming to an end and new RAC contract proposals being submitted and reviewed, the number of additional documentation requests (ADRs) has been reduced significantly. CMS advised its original RAC contractors to essentially hold off on issuing new ADRs until new contracts were finalized and implemented. One of these new contracts would establish a single, national RAC contractor who would be responsible for RAC audits on all Medicare DMEPOS, Home Health, and Hospice claims. This contract was initially awarded to Connolly Healthcare who currently serves as the Jurisdiction C RAC contractor for all Medicare claims.  While the contract award was issued in December 2014, a subsequent protest of the award initially delayed its implementation and eventually led to a CMS decision to issue new bids for all of the RAC contracts, including the national contract for DMEPOS, Home Health, and Hospice claims.

On November 16, 2015, CMS announced that while new bids for RAC contracts are being accepted and reviewed, the existing four RACs may continue to perform RAC reviews and may begin to issue additional ADR requests.  This signals an effective end to the moratorium that was placed on new RAC activity in February of 2014.  While it may take a few weeks for the current RACs to put in place the resources to re-start full scale activities, there is no reason to expect that they will not do so as soon as possible.

While this announcement is not an encouraging development, RAC audits are not new to the O&P community and hopefully we have learned some lessons from previous experiences with RAC auditors.  When RAC audits began several years ago, O&P providers faced a new reality as far as what documentation was expected in order for claims to be paid and stay paid.  Hopefully this education has not been forgotten as a result of the slowdown in RAC audits and the impact of the RACs becoming more active will be significantly lower.

RAC audits for O&P providers are still limited to a maximum of 10 audits per Tax ID every 45 days.  AOPA encourages everyone to make sure you are aware of these limits and to challenge any requests that exceed the limits.  While nobody is happy to hear that the RACs are back in business, at least temporarily, the lessons of the past should make for a less stressful future. The CMS announcement regarding RAC audits may be found on the CMS website.