You can add new, state-level recovery audit contractors (RACs) to your list of worries starting in 2012. All states are required to implement Medicaid RACs by Jan. 1 or lose out on federal funding, according to a CMS final rule posted Sept. 14. The new state-level RACs will be paid by states, operating under the same “contingency fee” model that the federal RACs use – i.e. they are paid based on cash recovered from you and your peers.
CMS will require the Medicaid RACs to be quite similar to federal RACs. The new RACs mirror existing ones by:
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Having to hire at least one full-time medical director who is an MD or DO;
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Having to hire certified coders, unless the state determines they are not required to review Medicaid claims effectively;
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Having to educate providers, “including notification to providers of audit policies and protocols”;
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Being limited to a three-year look-back period on claims; and
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Having limits on the number and frequency of records the RAC can request.
Medicaid RACs will have some differences however. Each state will be able to customize how their RAC handles medical necessity reviews, how they use audit findings for data mining and how they validate the accuracy of RAC findings (done via third-party contractor at the national level).
Karen Long contributed to this post (klong@decisionhealth.com).