CMS Announces Recovery Audit Contractor Program Improvements

After several years of frustration and advocacy, hospitals should soon see meaningful reform to the Recover Audit Contractor (RAC) program. Effective January 1, the amount of audit requests RACs will be able to request for a hospital will be reduced by three-fourths, from 2.0 percent down to 0.5 percent of the hospital’s paid Medicare claims from the previous year. That percentage can be adjusted up or down by CMS based on the hospital’s denial rate.   In another change, RACs will be limited to a six-month look-back period so long as the claim is billed within three months. In the past, the RACs could deny claims well after the hospitals’ timely filing period, depriving hospitals of the opportunity to rebill and obtain payment. More information is in the CMS announcement. CMS also announced that it has released the requests for proposals for the next round of multi-year RAC contracts with a target date of August 2016. (Andrew Busz)