In 2003, Congress created the Recovery Audit (RAC) program to help the Centers for Medicare and Medicaid Services (CMS) find and recover improper payments made by providers of Medicare and Medicaid. It took years, but it was finally implemented nationwide in 2009. Since then, the Recovery Audit program has been under some scrutiny, some calling it a witch hunt and others actually calling it RAC Fraud.

The RAC is a successful program in its own right. It has recovered more than $9 Billion since its inception in improper overpayments by Medicare and Medicaid providers and facilities. However, recently it has come under fire for their relentless attack of health care providers and the manner in which they bill their patients under these programs. There have been reports of these RAC Auditors not finding anything improper in their original audit, so they return again and again essentially looking for something to be able to report. Because, as many don’t know, these auditors are paid a percentage of the amount of improper payments so their incentive is to find anything and everything they can, just so they get a paycheck.

Another problem that is being uncovered is a little more complex, but altogether disturbing. As any provider knows, Medicare changes their policies quite often. A billing rule that may have been in use in 2011 may have changed 3 times and is completely different for 2014. These RAC auditors are given the authority to go back 3 years in their initial audit of a patients’ record. While conducting their audit, they have been found applying the rule of today to a claim that is 3 years old and may not have existed during the time the patient was being billed. It automatically flags the file as improper and now the provider is thrust into the world of appeals and legal processes that never should have happened in the first place. With up-to-date medical coders or a medical coding contract company accuracy in coding can eliminate the possibility of a RAC audit.

CMS supposedly has a training program in place for these auditors. The majority of RAC’s have no medical background, the only thing required is a Bachelor’s Degree in any field of study. So it seems you could have a degree in Anthropology and be a RAC Auditor with an hour long training seminar provided by CMS. But the real problem is the incentive for compensation for such job. When your paycheck is determined by how much improper payments and fraud you uncover, it brings up an old saying of “anyone can be good with a hammer, when you think everything is a nail”.

Effective March 2014, CMS has suspended the RAC program until further review. The backlog of nearly 350,000 cases in our nation’s court system is overwhelming and judges have reached their breaking point. CMS plans to use this time to reevaluate its program and to transition in new auditors. Hopefully some lessons have been learned.

This in an opportunity for you, as a Medicare Provider, to hire Professional Dynamic Network, a medical coding company that can ensure that your medical coding is conducted properly, avoiding any future RAC audits when the program does come back online. With our ISO 9000 compliant continuous education and training for our medical coders, you can be assured your medical coding is conducted with accuracy and integrity.