CMS makes changes to RAC program: 10 things to know

CMS has made a number of changes to the Recovery Audit Contractor program after evaluating provider concerns raised about the program.

Here are 10 things to know about the changes to the RAC program.

1. CMS will limit the RAC look-back period for patient status reviews to six months after the date of service if the hospital has submitted its claim within three months of the date of service.

2. CMS will establish additional documentation request limits based on a provider's compliance with Medicare rules. Providers with low denial rates will have lower additional documentation request limits while providers with higher denial rates will have higher limits. This change was made based on industry feedback that the additional documentation limits are the same for all providers of similar size and are not adjusted based on a provider's compliance with Medicare rules.

3. The additional documentation request limits will include instructions "to incrementally apply the limits to new providers under review." This change was made based on industry concern that providers who are not familiar with the RAC program are immediately receiving requests for the maximum number of medical records allowed.

4. Providers have shown concern about each recovery auditor's provider portal being formatted differently and showing different information. Based on that feedback, CMS will work with auditors to enhance their provider portals, "including more uniformity and consistency in the claim status section."

5. Recovery auditors will not receive their contingency fee until after the second level of appeal is exhausted. Previously, the auditors received their contingency fee immediately upon denial and recoupment of the claim. CMS said the delay in payment "helps assure providers that the decision made by the recovery auditor was correct based on Medicare statutes, coverage determinations, regulations and manuals."

6. Recovery auditors will be required to broaden their review topics to include all claim/provider types. This change was made based on providers' concern that recovery auditors focus much of their resources on inpatient hospital claims.

7. Recovery auditors will be required to maintain a first level of appeal overturn rate of less than 10 percent. That rate excludes claims denied due to "no or insufficient documentation or claims that were corrected during the appeal process."

8. Based on industry feedback that providers do not have a valid method to rate recovery auditors' performance, CMS will consider developing a provider satisfaction survey.

9. CMS said it "is confident that these changes will result in a more effective and efficient program, by enhanced oversight, reduced provider burden, and more program transparency."

10. The RAC program changes will be effective with each new contract award, beginning with the contract awarded Dec. 30, 2014.

More articles on the RAC program:

Contracts extended for private companies running RAC program
Hospitals have 70% overturn rate when appealing RAC claims 
9 tips for improving your hospital's wound care billing and coding performance 

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