Facts about RACs

Learning more about Recovery Audit Contractors

Nationwide there has been a recent increase in the number of RAC audits. Synchrony Rehab works closely with our customers to provide requested records and submit appeals for services provided. Here are some facts about RACs to improve understanding of this type of audit.

What does RAC stand for?
RAC stands for Recovery Audit Contractor, which is a private company contracted by CMS to be part of the Medicare Fee for Service Recovery Audit Program.

According to CMS, the mission of this program is to “identify and correct Medicare improper payments through the efficient detection and collection of overpayments made on claims of health care services provided to Medicare beneficiaries, and the identification of underpayments to providers so that the CMS can implement actions that will prevent future improper payments in all 50 states.”

What does a RAC do?
The Recovery Audit Contractor reviews Medicare Part A and Part B claims on a post-payment basis in a variety of healthcare fields. They audit claims to detect and correct improper payments. RAC audits are intended to uncover fraud, but it is also important to note that inadvertent mistakes or errors in documentation may also trigger an audit.

If an improper payment is identified, the contractor will alert the healthcare agency. The RAC may examine records and data going back three years from the date the claim was initially paid.

What triggers a RAC audit?
CMS receives referrals of potential improper payments from the Medicare Administrative Contractors (MACs), Universal Payment Identification Codes (UPICs), and Federal Investigative agencies (FIs) such as the Office of Inspector General (OIG) and Department of Justice (DOJ). At the discretion of CMS, they may request the RAC to review claims, based on these referrals. These CMS-Required RAC reviews are conducted outside of the established ADR limits.

Who are the Recovery Audit Contractors?
There are two main contractors divided up into five regions.

  • Region One is Performant Recovery, Inc. that oversees audits in KY, OH, IN, MI, CT, MA, ME, NH, NY, RI and VT
  • Region Two is Cotiviti, LLC that oversees audits in MS, IL, CO, NM, AR, KS, LA, MO, MN, NE, OK, TX, and WI
  • Region Three is also Cotiviti, LLC which audits in GA, NC, SC, AL, FL, TN, VA, WV, Puerto Rico, and the U.S. Virgin Islands
  • Region Four is Cotiviti GOV Services, formerly HMS Federal Solutions, which covers AK, AZ, CA, DC, DE, HI, ID, MD, MT, ND, NJ, NV, OR, PA, SD, UT, WA, WY, Guam, American Samoa, Northern Marianas
  • Region Five is Performant Recovery, Inc. (DME/HHH) which is dedicated to review durable medical equipment, prosthetics, orthotics, and supplies, along with home health and hospice agencies across the United States.

Who works for a RAC?
The companies employ nurses, certified coders, a physician contractor medical director, and therapists to assist with the evaluation of the claims selected for the audits.

Can a RAC be appealed?
RACs can be and are appealed by the Synchrony Rehab Clinical Support Team when it is determined that payment can be defended. The RAC appeal process is similar to the five-level Medicare claims appeal process through which fee-for-service providers appeal reimbursement decisions. The five levels of appeal include:

  1. Redetermination by the Fiscal Intermediary
  2. Reconsideration by a Qualified Independent Contractor
  3. Administrative Law Judge Hearing
  4. Medicare Appeals Council Review
  5. Judicial Review in U.S. District Court

How can I help with a RAC audit?
The RAC audits provide a due date for submission. Even if a medical record is incomplete, records must be submitted. Ensuring the following Synchrony Rehab expectations are followed assists with the ability to defend payment for the treatment provided.

  • Immediately forward RAC audit request received at the campus so that records and appeals can be submitted within the required timeframe.
  • All documentation should be completed timely.
  • All orders should be signed by the physician within 30 days.
  • Therapy documentation (POCs and UPOCs) and physician certifications should be signed by the physician within 30 days.
  • Documentation in the nursing and therapy notes should be patient specific.
  • Documentation should clearly justify medical necessity.
  • Utilize codes that appropriately support the therapy POC.
  • Documentation should support reasonable treatment and evidence the skilled services provided.