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RAC Expansion Schedule

RAC Phase In Expansion Schedule as posted on the CMS Website.
Implementation starts immediately in Yellow states; March 1, 2009 in Green states.



The four permanent RAC contractors and the respective states they will cover include the following:

    Region A
    Diversified Collection Services, Livermore, Calif.


    Region B
    CGI Technologies and Solutions, Fairfax, Va.


    Region C
    Connolly Consulting Associates, Wilton, Conn.


    Region D
    HealthDataInsights, Las Vegas


Additional states would be added to each RAC region in 2009, according to the CMS.





Find your state on the CMS Phase In Schedule map and you’ll know when the Recovery Audit Contractors will be coming. Or, perhaps, in some cases, they have already arrived in your state.



The first order of RAC business for yellow states was provider outreach, taking place shortly after the resolution of a dispute between two unsuccessful bidders for the RAC contracts on Feb. 6, 2009. Implementation of the RAC initiative in green states began March 1, 2009.




Phased Approach




In its phased roll out, CMS had identified first wave states – those colored yellow – as ones to receive provider outreach from their respective RACs. This occurred in October but came to halt Nov. 4, 2008 when a stay was placed on CMS by the Government Accountability Office (GAO). Green states would be the next line. 




The most recent map on the CMS Web site shows RAC activity beginning March 1, 2009 in both yellow and green states. RACs will implement their initiatives in blue states Aug. 1, 2009 or later.




Yellow States




Yellow colored states, as designated by CMS, include the following:









New Hampshire

New York



Rhode Island






North and South Dakota





New Mexico

South Carolina













Region A: Diversified Collection Services




CMS divides the United States into four regions – A through D. Of the 19 yellow, or “first wave” states, six are in Region A initially being worked by Diversified Collection Services, Inc. of Livermore, California (DCS) which negotiated a 12.45 percent contingency fee. 




These six states include Vermont, New Hampshire, Maine, Massachusetts, Rhode Island and Connecticut.




Medicare Part A claims, including Part B of A will not be available for RAC review until August 2009 due to the transition of Fiscal Intermediaries (FI) to Medicare Administrative Contractors (A/B MAC) — entities responsible for claims processing in Medicare’s fee-for-service plan. Part B claims in Rhode Island will also not be available for RAC review until August 2009.




All other Part B claims are now available (March 1, 2009) for RAC review in Region A.




Region B: CGI Technologies and Solutions, Inc




Yellow states in Region B, where there are no restrictions on Part A and B claims, include Indiana, Michigan and Wisconsin.


CGI Technologies and Solutions, Inc. of Fairfax, Virginia, is initially working in these three yellow states. Their contingency fee is 12.50 percent.




Region C: Connolly Consulting Associates, Inc




South Carolina, Florida, New Mexico and Colorado are the yellow states in this region — one that is being serviced by Connolly Consulting Associates, Inc. of Wilton, Connecticut. Their contingency fee is 9 percent.




Region D: Health DataInsights, Inc.




Yellow states in this vast expanse of territory include North and South Dakota along with Montana and Wyoming. Other yellow states include Utah and Arizona. Health DataInsights, Inc. is the RAC. The contingency fee is 9.49 percent




Green States




March 1, 2009, RACs were also scheduled to begin provider outreach activities in Oklahoma, Texas, Nevada, California and Hawaii.  California and Nevada are in Region D while Texas and Oklahoma are in Region C.




Blue States




After August 1, 2009, RACs are scheduled to rollout in a swath of blue states that stretches from New Jersey, Delaware and

Maryland and continues west to Washington, Oregon and Idaho. Blue states include the following:




















North Carolina

West Virginia






PRG-Schultz, Inc. will serve as a subcontractor to HDI, DCS and CGI in Regions A, B and D, while Viant Payment, Inc. will serve as a subcontractor to Connolly Consulting in Region C.  Each subcontractor has negotiated different responsibilities in each region, including some claim review.  




CMS provided RACMonitor with the following program highlights:




  • CMS will be establishing provider outreach sessions in conjunction with the RACs




  • Providers will not begin receiving correspondence from a RAC until the RAC and CMS have completed provider outreach




  • Implementation begins March 1 for Green states




  • CMS does not anticipate moving the outreach timeframes




In the three-year demonstration, RACs corrected more than $1.03 billion of improper Medicare payment. Of that amount, CMS says approximately 96 percent was overpayments collected from providers and a scant 4 percent was underpayments repaid to providers.




Of the $980 million in overpayments recouped by the RACs, $331 million, or about 35 percent, was the result of incorrect coding.








Chuck Buck

Chuck Buck is the publisher of RACmonitor and is the program host and executive producer of Monitor Monday.

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