January 15, 2013

CMS Publication Looks to Debunk RAC Myths

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CMS published a list of recovery auditor (RAC) program myths Dec. 17. Here are some of the most interesting:

Myth: Every RAC denial is overturned on appeal. While providers may wish that were true, CMS says just 2.4 percent of all 2010 claims have been challenged and overturned on appeal. About 5 percent of claims collected in fiscal year 2010 – or 8,449 – have been appealed, CMS says.

But appeals have proven worthwhile. As we discussed on Monitor Monday in June, 43 percent of appealed claims in fiscal year 2011 were ruled in favor of providers.

Myth: RACs have a contingency fee between 30 percent and 50 percent. It may seem as if RACs have that much motivation, but contingency fees in fiscal years 2009 and 2010 were between 9.0 percent and 12.5 percent, CMS says.

Myth: RACs don’t have physicians on staff. CMS says each RAC must employ at least one full-time equivalent contractor medical director and arrange for a substitute when the medical director is not available for “extended periods.” That FTE has to be a doctor of medicine or doctor of osteopathy who has “relevant work and educational experience.”

Myth: RACs do not tell anyone what they are reviewing. While some of the RACs’ websites don’t make it easy to find issues that pertain to your provider setting, the RACs are required to post issues online. And, of course, DecisionHealth and Monitor Monday bring them to you every week. Take note of the extended list below.

For more of the RAC myths, visit http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Recovery-Audit-Program/Downloads/RAC-Program-Myths-12-18-12.pdf.

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About the Author

Karen Long is the editor of Physician Solutions for DecisionHealth and oversees products that relate to fraud and abuse and HIPAA compliance for physician offices and home health agencies, and accreditation compliance for hospitals. In her almost four years at DecisionHealth, Karen also has been the compliance editor and a reporter for Home Health Line, nation's leading independent authority on home healthcare business, regulation and reimbursement.

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KLong@decisionhealth.com

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Karen Long

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