Differences Between RACs' Automated and Complex Reviews

CMS and RAC consultants make the following points on the difference between automated and complex reviews by recovery audit contractors.

Automated reviews. This level of review uses system edits to check claims for evidence of improper coding or other mistakes. Based on these reviews, RACs send the provider a letter demanding repayment.

For claims that were paid by an intermediary, the provider has 30 days to dispute the RAC's overpayment determination, in what is termed a "rebuttal." If the provider does not successfully refute the RAC's determination, the intermediary will offset the overpayment after 30 days.

If the claim was originally paid by a carrier, the carrier will adjust the claim and the provider will receive a demand letter and a revised explanation of benefits. The provider has 41 days to repay the overpayment. There is no rebuttal period for a claim identified by a RAC when the claim was originally paid by the carrier. However, the provider has the option of contesting the RAC's determination, which the RAC may review and rescind.

Complex reviews. In these reviews, licensed medical professionals individually examine a claim and related documentation to determine whether the service was covered and was reasonable and necessary. Although these personnel have medical training, they do not have to have expertise in coding.

In the first step of a complex review, the RAC sends a letter requesting medical records. The RAC then has 60 days to review the information and notify the provider in writing if an overpayment is discovered.

Unlike in an automated review, recoupment is the same regardless of whether the claim was paid by the intermediary or the carrier. The overpayment amount will be offset against each provider’s future payments. If a significant amount is owed, the provider may request an extended payment plan. The provider has the right to appeal the RAC's final determination.

Learn more about CMS' RAC program.

Read more coverage on RACs:

- Hospitals in RAC Region B Most Successful in Appealing Denials

4 Ways Medicaid RACs Could Differ From Medicare RACs

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