Certainly by now you are familiar with the CMS RAC program. How familiar depends on whether or not you have had the good fortune to go through this process. Regardless if you’ve been audited or not, you should know a little about the process for your own protection as a provider of Medicare or Medicaid fee-for-service patients.

The country is divided into four regions and one RAC is responsible for each area. If you are being audited by the RAC in your region, you will first receive a letter stating so.

These RAC audits are post-payment audits. Essentially what this means is that you will have already received payment for the services provided. However, if an overpayment is found, you will be required to do one of three options:

• the submit a valid appeal
• send a check to your local Medicare carrier
• relinquish payments of future claim payments which will be applied towards the overpayment

This part of the process is the same whether you are being audited manually or through automated means.

What You Need To Know If Your Healthcare Facility is Audited

RACs are limited to reviewing your claims as far back as three years, but no further. The Centers for Medicare and Medicaid Services authorizes the RACs to audit certain types of claims. These types of claims are listed on your region’s RAC website. It’s definitely an advantage to know what types of claims are prone to audit so you can make sure your medical coding is accurate going forward.

Automated audits are the simpler of the two processes. Basically using algorithms the RAC uses a computer to do the auditing. This type of audit requires no medical records and little input from you or your staff.

The more complex audit is a manual audit. The RAC is then allowed to request medical records from you and you must comply. This is somewhat of a burden to you and your staff, however there is a limit to the number of files the RAC can request in a 45 day period, although the number is quite high.

RACs have strict polices they must follow, they don’t make up their own policies of how the audit is processed or what is audited. They are bound by National Coverage Determinations (NCDs), coverage provisions in interpretive manuals, national coverage and coding articles, local coverage determinations (LCDs) and local coverage/coding articles in their jurisdiction.