Although last year’s pandemic put a brief pause on Recovery Audit Contractor (RAC) audits — this year they are once again in full swing. Auditors are picking up the pace to make up for lost time. So, your chances of getting audited are higher than ever before.
What is a RAC Audit?
RAC audits are run by the Centers for Medicare and Medicaid Services (CMS). Their goal is to uncover improper Medicaid and Medicare claim payments and get the money back. RAC auditors have collected back over $2 billion for CMS. And considering they are paid on a contingency basis (the more overpayments they find, the higher their pay) you can bet that during an audit they’ll be combing through your medical records very carefully.
While you can’t avoid every RAC audit trigger, you can be prepared and informed so that when the time comes you can get through your RAC audit and hold on to your hard-earned cash.
Responding to a RAC Audit Letter
If your practice receives a RAC audit notification letter, it’s generally to investigate suspicion of an improper payment on a claim (either an overpayment or an underpayment). RAC auditors will usually request medical records to complete the audit. For example, they may request medical records that detail a more complex procedure to ensure you were paid correctly for the services you provided. Medical records that don’t meet the criteria for medical necessity or claims that contain CMS coding violations could uncover an overpayment. In these cases, you could be required to send the money you previously received back to CMS.
Your response to a RAC audit letter is critical! If you receive a letter from a RAC contractor requesting medical records, don’t delay. You have 45 calendar days to either submit a response or file an extension. If you don’t respond at all, the RAC could simply make a determination that you were overpaid, and take their money back.
If you receive a notification from a RAC requesting that an auditor visit your practice to see your medical records in person, you have the option to allow or deny the request. RAC can’t cite an overpayment just because you denied them access to your practice.
Once you submit the requested medical records, the RAC has 60 days to get a determination to you. If all goes well, this could be the end of the audit. If the RAC determines you received an overpayment, the process will continue, and you could be required to pay the money back.
Tip: Conduct an internal audit on the same records being requested. This way you’ll be ready to appeal in case the findings indicate you were overpaid. Also, your audit findings will provide you with documentation to submit in an appeal.
Receiving an Overpayment Demand Letter
If the audit of your records determines you received an overpayment, you will receive an overpayment demand letter from the RAC. After receiving a demand letter, you are required to call the RAC within 15 days to discuss how you plan to proceed. In response to an overpayment demand letter, you essentially have three options:
- Pay it in full
- Request an extended repayment schedule
- File an appeal
Filing a RAC Audit Appeal
If you disagree with the overpayment demand letter you received, you have the option to appeal the findings. There are five different levels of appeals, and each one has its own set of deadlines that you must adhere to.
- Level 1: The first appeal level is redetermination. You have 120 days to file the first appeal but if you get it in within 30 days you can avoid Medicare recoupment action. You should get a determination within 60 days of receipt of your redetermination request.
- Level 2: The second appeal level is reconsideration. If you aren’t satisfied with the result of your first appeal, you have 180 days to submit an appeal to a Qualified Independent Contractor (QIC), who should issue a decision within 60 days of your reconsideration request receipt.
- Level 3: If you aren’t satisfied with the result of your second appeal, you have 60 days from receipt of that decision to request a hearing before an Administrative Law Judge who will usually issue a decision within 90 days of the hearing request receipt.
- Level 4: If you aren’t satisfied with the Administrative Law Judge’s decision, you have 60 days to submit a request to the HHS Department Appeals Board (Medicare Appeals Council) to review your case. You should have a determination from the Medicare Administrative Contractor (MAC) within 90 days of your review request receipt.
- Level 5: If you aren’t satisfied with the MAC determination, you have 60 days to submit your appeal to a Federal District Court. You must be appealing a minimum of $1,130.00 to take it to a federal district court.
While it might be intimidating, if you believe there is a discrepancy in your audit, don’t be afraid to appeal it. Just make sure to stay on top of the deadlines because if you miss one, you’re out of luck.
Healthcare attorney, Jody Erdfarb, JD, can help you prepare for a RAC audit and appeal during her online training. Jody will help you be better prepared should you be targeted for a RAC audit. You’ll gain the tactics you need to accurately respond to audit notifications to ensure you receive the best outcome possible for your practice. Don’t wait! Sign up for this online training today.
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