Medicare-certified hospitals are subject to review by Medicare Recovery Audit Contractors (RACs).
The original RAC demonstration program was authorized by Congress in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) as a way to find overpayments and underpayments in Medicare fee-for-service reimbursements to healthcare providers. What began as a demonstration program in 2005 in CA, FL, and NY (the states with the largest number of Medicare claims) expanded into MA, SC, and AZ in 2007. The demonstration program identified almost $1 billion in improper payments. Four permanent RAC contractors (assigned by geographic regions) were named, and a national rollout plan was put in place to have all states under the RAC program by 2010.
The impact of this program has wide-ranging implications for all healthcare providers – including behavioral healthcare programs receiving Medicare funding.
“Doc Fix” Passed Into Law Includes Excellence in Mental Health Act, Delay of ICD-10, and More. On April 1, 2014, President Obama signed into law (P.L.113-93) a temporary, 12-month “doc fix.” The action avoids a 24% reduction in payments to physicians who treat Medicare beneficiaries that had been set to take effect March 31. The law also includes four additional provisions of note. 1) The law includes a $900 million demonstration of the Excellence in Mental Health Act – a bill NAPHS has supported – in eight states for two years to establish federally qualified community behavioral health clinics that would be eligible to participate in the Medicaid program. 2) The law includes an Assisted Outpatient Treatment Demonstration program that will provide $15 million per year from 2015 through 2018. 3) Congress is delaying enforcement of Medicare’s “two-midnight rule” for an additional six months (through March 31, 2015) and prohibiting recovery audit contractors from auditing inpatient claims spanning less than two midnights for the six-month period. 4) The law also approved a one-year delay in implementation of ICD-10 (until October 1, 2015).
CMS MedLearn Matters (SE1024): "RAC Demonstration High-Risk Vulnerabilities: No Documentation or Insufficient Documentation Submitted" [View]
CMS announces limits on the number of medical records that may be requested by recovery audit contractors [View]
RECURRING: CMS Web site on RACs (Recovery Audit Programs).