December 29, 2014

CMS Clears Way for RACs to be on Track for 2015

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The current crop of Recovery Auditors (RAs) is on track to continue active auditing through Dec. 31, 2015 as the Centers for Medicare & Medicaid Services (CMS) slogs through a Court of Federal Claims challenge on the procurement of contracts in RAC regions 1, 2, and 4.

News of the extension was posted the night before Christmas on the federal procurement website when CMS issued a Justification & Authorization for Other than Full and Open Competition. The administrative period will extend until April 30, 2017, during which time the RAs will handle appeals and reconciliation.

“We believe that this extension is a concession (associated with) the quagmire that the re-procurement of the contracts has become,” Emily Evans told RACmonitor. “CMS does not anticipate a decision from the Court of Federal Claims until late summer 2015. At that point, CMS will either have to start over with a new procurement or award the contracts to the four bidders, which includes three of the four incumbents plus Sagebrush Solutions in Dallas.”

Evans, a partner at Obsidian Research Group, believes that although CMS could award the home health, hospice and DMEPOS RA (Region 5) contract and the Region 3 A/B contract, she thinks it is unlikely that the agency will do so before late 2015, because those new contracts would conflict with the extension in a number of ways. 

“In 2015, we (Obsidian Research Group) believe that RAC recovery revenues will be in line with those quarters after CMS placed a moratorium on short-stay inpatient claims recovery (Q4 2013),” Evans wrote. “There may be some improvement to those numbers if RACs continue a very late trend of medical necessity reviews, which are largely focused on inpatient, acute-care hospitals.”

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Chuck Buck is the publisher of RACmonitor and the executive producer and program host for Monitor Mondays.

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Chuck Buck

Chuck Buck is the publisher of RACmonitor and is the program host and executive producer of Monitor Monday.

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