Recovery Audit Contractors version 3

Recovery Audit Contractors (RACs) Support a Temporary Freeze on RACs Reps. Lois Capps (D-CA) and Devin Nunes (R-CA) introduced the “Medicare Recovery Audit Contractor Program Moratorium Act of 2007” (HR 4105) that would enact a one-year, nationwide moratorium on the Recovery Audit Contract (RAC) program. The legislation would require the Centers for Medicare & Medicaid Services (CMS) and the Government Accountability Office (GAO) to evaluate the RAC program and report to Congress on their findings. The CMS report would include specific information about the number and types of claims reviewed, the types of reviews, and the outcome of appeals. The GAO report would examine the RAC program’s compliance with current Medicare policy as well as compare its efficiency with existing Medicare quality improvement programs and contractors. CMS would also be required to submit quarterly reports to Congress once the RAC program resumes There are several major areas of concern with regard to the RAC program: • RACs are paid a fee based on a percentage of overpayments they collect which has created a system which favors aggressive denials. Instead, the RACs should be paid a contractual amount unrelated to collections. • RACs should not review claims based on medical necessity because practice patterns vary by community. • Additionally, RACs communicate with the hospitals via regular mail service and there is no way of tracking the ...