Avoid Paybacks to RAC Auditors by Following 7 Essential Tips

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Avoid Paybacks to RAC Auditors by Following 7 Essential Tips

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recovery audit contractors

One audit type that’s always looming over medical practices involves Recovery Audit Contractors (RACs). These organizations are appointed by each MAC to uncover, confirm, and take back reimbursements Medicare made in error.

Because they get paid a percentage of what they recover from medical practices, RACs are sometimes referred to as Medicare’s “bounty hunters.” Recovery audit contractors are assigned to review not only traditional Medicare claims, but also claims submitted to Medicare Parts C and D, as well as Medicaid.

To ensure your reimbursements don’t fall prey to recovery audit contractors, keep these seven tips in mind.

1. RACs Have a Three-Year Lookback Period

Recovery audit contractors cannot review claims that are more than three years past the date you filed your claim. The RACs can request exceptions to the three-year lookback period, but those are rare. Therefore, if a RAC contacts you asking for records related to claims you filed more than three years ago, you don’t have to send them unless the RAC has proof that they received an exception to the three-year rule.

2. When RACs Request Info, You Must Respond

If a recovery audit contractor requests documentation to support your claims, they’ll indicate how much time you have to respond (for instance, they may say you must submit your documentation within 45 days). If you don’t, the RAC will assume you’re guilty, and the full amount of the claim will be sent to the MAC for adjustment. If you need more time, you can request an extension, so make sure you either respond to the request or you file a time extension or you could be out thousands.

3. RACs Can Make One Request Every 45 Days

The recovery audit contractors can request a specific number of records (based on your practice type and size) from your practice every 45 days, but when you get that request, they can ask for multiple records. For instance, if you have a solo outpatient practice with fewer than five employees, they can ask for 10 records every 45 days.

4. The RAC Has 30 Days to Send You Results

Recovery audit contractors have just 30 days from receipt of your medical record documentation to get back to you with results, unless they get some sort of extension first from CMS. If they don’t get back to you with the results within 30 days, then they lose their contingency fee.

5. RACS Must Consider Policies From Date of Service

The RAC can only review your claims under the rules and regulations that were in effect on the date of the claim submission—they can’t retroactively apply new rules to old claims. So if your date of service was April 1, 2022 and a new coding rule went into effect on May 1, 2022, the RAC cannot hold your claim to the standards from May. They must review your claim under the April rules.

6. You Have 30 Days to “Discuss” RAC Results

Before the RAC sends their results to the MAC, they’ll send them to you, and you have a 30-day “discussion period” after that when your medical director can speak to a physician at the RAC to talk about any disagreements you have with their determinations.

7. File Appeals When Warranted

If the MAC sends you a demand letter asking for you to submit reimbursement back to them, you can file an appeal. You should make all appeal requests in writing rather than doing so over the phone. Don’t expect the appeal process to move quickly, however. There’s a backlog of appeals in the system, and the average appeal processing time in 2020 was 1,361 days.

Want more tips on how to avoid having to pay back your reimbursement following a RAC audit? Check out the 60-minute online training, “Stop RAC Auditors From Taking Back Your Medicare Money.” During this session, healthcare attorney Jody Erdfarb, Esq., will walk you through every step of the process to ensure you hang on to every penny you deserve.


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