RACs face opposition

Expansion of the Recovery Audit Contractor (RAC) Program is facing opposition on several fronts. Industry associations and members of Congress support a delay until findings from the first pilot program can be evaluated, according to Ingenix Industry Insight 461 that was published this month.

Efforts to delay the expansion of the program include the introduction of legislation HR 4105 in the U.S. House of Representatives. Referred to as the Medicare Recovery Audit Contractor Moratorium Act, this bill was introduced in November 2007 and seeks to impose a one-year moratorium on the expansion of the program. HR 4105 continues to gain support within the House of Representatives. There are currently 77 co-sponsors of the legislation.

Other organizations have pledged their support of the bill, including the American Hospital Association, American Health Information Management Associaiton, and the American Association of Healthcare Administrative Management. While these organizations are supporting a delay in the expansion of the RAC program, they are not protesting the overall auditing of claims. Instead, these organizations are questioning the audit process during the pilot stage program, as well as the scope of work required to expand the RAC process to all 50 states.

The RAC Program was established by the Centers for Medicare and Medicaid Services (CMS) to ensure that correct payments are being made to providers. Part of the controversy with the RACs is that they are reimbursed on a contingency-fee basis and keep a percentage of overpayments, which gives them a strong financial incentive to search out improper payments. Several recent news reports claim that the RACs have been overly aggressive in their audits.

Full text of Ingenix Industry Insight 461 can be found here. A list of the most recently published Ingenix Industry Insights can be found here.