CMS: 5 Key Measures of Success for Medicare RACs

CMS recently released a report on the state of Medicare and Medicaid recovery audit contractors, or RACs, in fiscal year 2012.

The RAC program started in 2009 and involves independent contractors, hired by CMS and tasked with auditing hospitals, health systems and other providers to ensure all Medicare and Medicaid payments are proper. Medicare RACs have performed a vast majority of the audits in the first four-plus years, recouping almost $2.25 billion in Medicare funds from hospitals and other providers from July through December 2013 alone.

In its FY 2012 report, CMS identified the following five key factors it uses to measure the RAC program's success.

1. Ensuring accuracy. CMS has several procedures and policies in place to make sure RACs accurately identify improper payments. For instance, the agency must approve all new review topics for potential audits before RACs begin widespread review. RACs are also required to have at least one full-time medical director on staff who must be involved in all phases and the medical review and quality assurance processes.

2. Ensuring efficiency and effectiveness. To make the RAC program run as efficiently and effectively as possible, CMS works to maintain continued communication with all stakeholders, improve the RAC data warehouse and allow providers to electronically submit documentation.

3. Maximizing transparency. CMS posts improper payment correction information on a quarterly basis on its website to make the program transparent. The agency also posts the RAC statement of work (which includes all tasks and responsibilities associated with the review of claims) and educational information about preventing improper payments.

4. Minimizing provider burden. CMS says it works with providers and suppliers to help reduce the burden of RAC review. Each auditor also has a customer service center to address provider concerns, and CMS ensures claims reviewed by one RAC aren't reviewed again by another, unless there are concerns about possible fraud.

5. Developing provider education. CMS engages in various efforts to educate providers on avoiding improper payments. For instance, the agency has partnered with state and national hospital associations to provide periodic updates on the program through conferences and webinars.

More Articles on RACs:
Medicare and Medicaid RACs in FY 2012: 8 Statistics
Rep. Jim McDermott Advocates for More RAC Accountability
5 Key Statistics on RAC Audits in Q4 2013 

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