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The Centers for Medicare & Medicaid Services (CMS) has “paused” additional documentation requests by RAC contractors until such time as the new RAC contracts are in place. This pause began on Feb. 21, 2014 for post-payment reviews and Feb. 28, 2014 for pre-payment reviews. At the same time CMS announced five improvements to the RAC program that will be included in the next selection of the RAC contracts. These changes are small steps in an effort to address hospital concerns with the ever increasing administrative burdens caused by the RAC program.

RAC Program Improvements


Program Change

Upon notification of an appeal by a provider, the Recovery Auditor is required to stop the discussion period.

Recovery Auditors must wait 30 days to allow for a discussion before sending the claim to the MAC for adjustment. Providers will not have to choose between initiating a discussion and an appeal.

Providers do not receive confirmation that their discussion request has been received.

Recovery Auditors must confirm receipt of a discussion request within three days.

Recovery Auditors are paid their contingency fee after recoupment of improper payments, even if the provider chooses to appeal.

Recovery Auditors must wait until the second level of appeal is exhausted before they receive their contingency fee.

Additional documentation request (ADR) limits are based on the entire facility, without regard to the differences in department within the facility.

The CMS is establishing revised ADR limits that will be diversified across different claim types (e.g., inpatient, outpatient).

ADR limits are the same for all providers of similar size and are not adjusted based on a provider’s compliance with Medicare rules.

CMS will require Recovery Auditors to adjust the ADR limits in accordance with a provider’s denial rate. Providers with low denial rates will have lower ADR limits while provider with high denial rates will have higher ADR limits.

Source: http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Recovery-Audit-Program/Downloads/RAC-Program-Improvements.pdf

RAC Issues for the Week of March 3 – March 7, 2014:

RAC Region C Connolly

Outpatient Hospital

  • Incorrect Billing of Hydration Therapy – OP – C003932013 – Providers are billing Hydration Therapy with diagnosis codes that are not considered reasonable and medically necessary per applicable LCDs.


  • Incorrect Billing of Major Joint Replacement Procedures – Carrier – C004142013 – Overpayments were identified where ICD-9 codes billed were not in accordance with billing requirements outlined in Local Coverage Determinations.

About the Author

Dr. Margaret Klasa is the medical director for Context4 Healthcare. She is responsible for the company’s business knowledge discovery unit for medical context as it relates to the daily development of data products and software for medical claims editing and coding, with an emphasis on clinical and regulatory guidelines for Medicare, Medicaid and commercial payers.

Contact the Author


To comment on this article please go to editor@racmonitor.com


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