WASHINGTON – The Centers for Medicare & Medicaid Services announced last month it would resume implementation of its Recovery Audit Contract (RAC) program.
The program, which searches for improperly billed Medicare claims, was placed under a stop order in November, due to protests from potential contractors over the award process. The protest has now been resolved and the program will be under way in 2009, as scheduled.
Information technology is a big help in getting through these audits, industry insiders say, but even more critical, they say, are the processes used.
"Today's hospitals need to be proactive in designing processes to ensure appropriate medical necessity certification and documentation, and processes to ensure coding accuracy," Joseph Zebrowitz, MD, advises. Zebrowitz is executive vice president of Executive Health Resources, which provides advise for physicians. "Without having strong processes in place, hospitals may find themselves returning a significant amount of their revenues to CMS," he warns.
CMS awarded RAC contracts last October and plans to roll out the RAC program in phases through 2009 in four regions:
- Region A, awarded to Diversified Collection Services, Inc. of Livermore, Calif., covers Maine, New Hampshire, Vermont, Massachusetts, Rhode Island and New York.
- Region B, awarded to CGI Technologies and Solutions, Inc. of Fairfax, Va., covers Michigan, Indiana and Minnesota.
- Region C, awarded to Connolly Consulting Associates, Inc. of Wilton, Conn., covers South Carolina, Florida, Colorado, and New Mexico.
- Region , warded o HealthData Insights, Inc. of Las Vegas, Nev., covers Montana, Wyoming, North Dakota, South Dakota, Utah and Arizona.
Additional states will be added to each region in 2009. PRG-Schultz, Inc. and Viant Payment Systems, Inc. will be added as subcontractors, CMS officials said.
The federal government reports it recovered nearly $700 million in improper Medicare payments through its RAC pilot program, conducted from 2005 to 2008.
The RAC program was made permanent under the Tax Relief and Health Care Act of 2006, which requires the Department of Health and Human Services to expand the program to all 50 states by no later than 2010.
CMS officials said the RAC pilot program had "a limited financial impact on most providers," with the vast majority of hospitals in the pilot states impacted by less than 2.5 percent to their bottom line.
