RAC Funding Sky Rockets

The Centers for Medicare & Medicaid Services (CMS) implemented the Medicare Recovery Audit Contractor (RAC) program in March of 2009. The program was expanded to all 50 states on January 1, 2010. In President Obama’s recent Fiscal Year 2012 budget to Congress, the Obama Administration proposes to more than double the amount of money available to conduct RAC audits, dramatically expanding this program. 2010 funding was $26,000,000. 2011 and 2012 proposed funding is $259,000,000 and $500,000,000 respectively.

CMS supply’s the RACs with data files containing Medicare claims history followed by monthly updates. RACs then use proprietary software to analyze the claims for possible improper payments. RACs attempt to identify improper payments resulting from:
• Incorrect payment amounts
• Non-covered services
• Incorrectly coded services; and
• Duplicate services.
ADVOCATE software processes should detect these discrepancies prior to claim submission reducing the chance of client RAC audits.

As more information becomes available, we will continue to keep you up to date.

With best regards,
Kirk Reinitz, CPA