CMS Releases FAQs on Medicaid RACs

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CMS recently issued guidance (pdf) on several frequently asked questions regarding the Medicaid Recovery Audit Contractor program.


Some of the FAQs include the following:

Q: What flexibilities are afforded to States in the Final Rule as they design and implement their RAC programs?

A: In accordance with the final rule, states have considerable flexibility regarding the design, procurement and operation of their respective RAC programs including:

• Establishing the compensation structure for the identification of underpayments
• State appeals process
• State exclusion of claims from Medicaid RAC review
• Bundling of procurements
• Coordination of the collection of overpayments
• Contingency fee rates (States have complete flexibility in the contingency fee rates they pay, exclusive of federal financial participation. Absent an exception, however, CMS will provide FFP only for amounts that do not exceed the then-highest contingency fee rate paid to Medicare RACs).

Q: Does the Medicaid RAC program include the review of claims from both Medicaid and the Children’s Health Insurance Program or Medicaid only?

A: Section 6411 of the Patient Protection and Affordable Care Act expanded the RAC program to Medicaid and Medicare Parts C and D, not CHIP. Accordingly, CHIP is not included within the scope of the Medicaid RAC final rule. States, however, are not precluded from otherwise reviewing CHIP claims to identify overpayments and/or underpayments.

Q: What should a state do to prepare providers for Medicaid RAC audits? Will providers need to implement new compliance procedures?

A: A state should be as informative as possible about the implementation of its Medicaid RAC program. Information furnished to providers should include, at a minimum, the name and contact information of the RAC vendor selected by the state, when the RAC will begin working to identify overpayments and underpayments and a general description of the scope of its RAC program. We do not expect that providers will have to undertake any major activities to prepare for Medicaid RACs. Providers may need to identify a point of contact, be aware of deadlines, prepare medical records and familiarize themselves with Medicaid coverage guidelines, as well as educate staff.

Related Articles on Medicaid RACs:

3 Biggest Ways Medicaid RACs Will Affect Hospitals in 2012

How to Cope in This Economic Climate: 4 Thoughts From Elkhart General CFO Kevin Higdon

How Will Medicaid RACs Impact Hospitals? 3 Responses

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