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Medicaid RAC processes are diverse, disparate, and not an easy area in which providers can collaborate and share information. The mere fact of knowing there is an audit lurking causes panic and dread, but knowing very little about the parameters of that audit and how it is affecting us can foster even more panic and dread.

HMS manages RAC oversight contracts, performing work in 30 states, all of which handle things very differently. We can say based on that simple fact that we may come to see more uniformity in the denials being issued and the guidance being offered (if any). Thus far, when it comes to Medicaid very little is known from state to state – and, surprisingly, within individual states, in some cases.

A number of Medicaid racs have conducted audit outreach during the last couple of months, and this e-brief will focus on the lingo and diversity you may hear in your state – and areas of importance no matter what state you are in. 

Medicaid RAC Trends

One of the big impacts noted in Hawaii, for example, is audit requests for self-audits. In this particular scenario, the provider is given information related to an audit focus item and instructed to review and submit correction as appropriate. This is a little out of the ordinary for providers unless they are involved in Office of Inspector General (OIG) or Department of Justice (DOJ) proceedings. Audits of this type can be of an automated or complex nature, and ensuring you are reviewing and applying rules for this type of audit is key to avoid the next problem area seen in some Medicaid RAC audit outreach measures: the “referral for fraud and abuse.” We have heard this phrase in the Medicare RAC world as well. The Government Accountability Office (GAO) report on Medicare RACs (Recovery Audit Contractors’ Fraud Referrals) has stated that this only had occurred twice, each coming in the form of Zone Program Integrity Contractor (ZPIC) referrals. Continue to be on the watch for this and make sure you are following the rules.

Sample Lingo

  • Additional documentation requests (ADRs), or medical record requests

This term is very common among all the contractors, but will pop up in various modes and with various limits. Some providers are receiving electronic and written requests, and in some cases reports are being issued due to contractors not receiving letters and not being aware of electronic requests. Stay abreast of the happenings in your state. The time frames range from 30-45 days for responses to the ADRs.

  • Reimbursement for ADRs

This appears not to be a requirement in most states. This may be a cost you must absorb, but remember to investigate EsMD.

  • Review Types

Complex review (requires the medical record)

Automated review (based on coding and billing rules, with data mining being a core driver in identification) We do not see much on semi-automated reviews, but this can occur as well.

Self-audits (may cause increases in workload and internal    resource needs)

  • Denials/overpayment notices (the reason for the denial and payback instruction)

We all know what these are from our Medicare RAC experiences; however, in the Medicaid RAC world we have these various phrases:

  1. TNO (tentative notice of overpayment)
  2. NOV (notification of violation)
  3. Initial findings letter (draft of findings)
  4. Written notice of overpayment
  5. Findings of fact letter
  6. Notification letter
  7. Review result letter

Response times for these vary, but as a whole, they can affect your appeal process or repayment deadlines. Pay close attention to these and be ready to act, as most response time frames are short.

  • Appeals

Request for administrative review

Request for hearing

North Dakota has an interesting appeal process that allows for two levels of appeals of RAC denials. “Should the provider disagree with the audit findings, an appeals process is in place, which includes two informal appeal levels,” the official language reads. “The decision in the second informal appeal level is decided by the RAC medical director. After the two informal appeal levels are exhausted, the provider has appeal rights available through the state.”


The appeals process with most other RACs involves appeal to the Medicaid Hearing Office, issued in writing or verbally (and/or via a written or verbal hearing with an administrative law judge).

  • Payment

Most repayments should occur within 30 days of overpayment   notification.

  • Recovery

Off-set collection seems to be the favored method of repayment, versus mailing a check. However, there are some RACs that prefer mailing of a check, i.e., North Dakota.

Stay tuned for more Medicaid RAC updates, analysis and comparison over the coming weeks.

About the Author

Sharon Easterling is president and CEO of Recovery Analytics.

Contact the Author


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


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