Breaking News: CMS Temporarily Halts RAC Audits to Transition Contracts

After receiving pressure from more than 111 individual members of congress about the overaggressive nature of CMS’ RAC audit program, CMS announced earlier this week that they will temporarily halt new RAC audit requests to allow existing contracts with audit contractors to expire.  

This announcement is in stark contrast to previous guidance from CMS, in which CMS announced they planned to extend the current contracts through the implementation of the new contracts. So, this is quite a policy change in just a few months as pressure has been ratcheted up on CMS from congress.

CMS anticipates new contracts with RAC’s to be completed in the next few months. However, February 27, 2014 will be the final day current RAC’s can send an Additional Document Request (ADR) request to a provider. Unfortunately, once the new RAC contracts are signed, the new audit contractors will have the ability to go back and review claims submitted throughout the hiatus time period. Current RACs will be allowed to finish work on existing audits that have already been initiated.

In their release, CMS announced that they are reviewing Additional Document Request (ADR) timeframes for review, a potential limit on ADR requests and facilitating better communications between the RACs, MACs and providers.  CMS has also agreed with an OIG recommendation that RACs performance evaluation must include the amount of claims that are identified and eventually overturned at a higher level of appeal.

There are additional changes that CMS is reportedly making to the new contracts for auditors, including:

  1. RAC’s will have to wait 30 days to allow for a discussion before sending the claim to the MAC for adjustment. Meaning that providers will not have to choose between initiating a discussion and an appeal.
  2. RAC’s will be required to confirm with the provider receipt of a discussion request within three days.
  3. RAC’s will wait until the second level of appeal is fully exhausted before they receive their contingency fee.
  4. CMS will establish new and revised ADR limits that will be diversified across different claim types (e.g., inpatient, outpatient).
  5. CMS will require RAC’s to adjust the ADR limits in accordance with a provider’s denial rate. Providers with low denial rates will have lower ADR limits while providers with high denial rates will have higher ADR limits.
Now is the time to keep the pressure on CMS and your member of congress to ensure our voice is heard loud and clear throughout the time CMS is awarding the new RAC contracts. Accountability and transparency are badly needed in the RAC program and we must continue to voice our frustrations to ensure we are represented
in any changes that are made.                                                       Information source: VGM


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