CMS Announces Limited Return Of RAC Program
By Christine Kern, contributing writer
CMS announced it has resumed recovery audits on a limited basis.
CMS has announced the limited return of the controversial Recovery Audit Contractor Program in August. The program has been dormant since June 1 when current audit contracts expired.
CMS sent a communication to congressional health staff members from Lauren Aronson, Director of the Office of Legislation at CMS, informing them of the decision, according to Health Data Management.
The email stated: “Today, the Centers for Medicare and Medicaid Services announced plans to modify contracts with current Recovery Auditors to allow for a limited number of Medicare fee-for-service claim reviews beginning in August 2014.
“Current Recovery Auditors will conduct a limited number of automated reviews and a small number of complex reviews on certain claims including, but not limited to: spinal fusions, outpatient therapy services, durable medical equipment, prosthetics, orthotics and supplies; and cosmetic procedures. The Recovery Auditors will not conduct any inpatient hospital patient status reviews during this limited restart period.”
The Medicare RAC program was established by the Tax Relief and Health Care Act, enacted in December 2006. A new paragraph was added to section 1893 of the act, requiring the establishment of a national RAC program for Medicare Part A and Part B. And, Section 6411(b) of the Affordable Care Act amended section 1893(h)(1) of the act by requiring the establishment of RAC programs for Medicare Parts C and D as well.
“Section 1893(h) of the Act requires CMS to contract with entities to identify and correct improper payments for Medicare claims,” states Aronson. “This limited Recovery Audit Program restart may continue until the new Recovery Auditor contracts are awarded with sufficient time for an orderly transition. The restart will not include the Recovery Audit program improvements that are planned for the new contracts.”
Since the audit program began in 2009, roughly $8 billion in improper Medicare payments have been identified and returned to the federal government. But hospitals have complained that the program has tied up crucial funds in endless appeals.
According to CMS, the “continued delay in awarding new Recovery Auditor contracts” has led CMS to initiate contract modifications to the current Recovery Auditor contracts that will allow the Recovery Auditors to resume limited reviews. In addition, CMS says that it “remains hopeful that the new round of Recovery Auditor contracts will be awarded this year.”
In February, 111 bipartisan members of Congress sent a letter to then-Health and Human Services Secretary Kathleen Sebelius arguing that aspects of the RAC program are unfair and violate the way that the Medicare program was intended to operate by raising out-of-pocket costs for beneficiaries.
The American Hospital Association filed a lawsuit in federal court in May seeking to force the agency to meet its statutory requirement to decide Medicare-payment appeals within 90 days. Currently appeals can take as long as five years. A two-year moratorium is in place preventing new appeals from being filed. The appeals backlog for Medicare payment decisions has grown tenfold since the start of the recovery audit contractor program.
The resumption of the program was hailed by The American Coalition for Healthcare Claims Integrity, which represents the audit contractors. “As long as there's oversight being done, that's a good thing,” said Becky Reeves, a spokeswoman for the group. “There's still a pretty large gaping hole in what these contracts are able to review.”