It is finally here! The Recovery Audit Contractors’ (RACs’) second verse has arrived, given the new statement of work (SOW) and the final (we hope) awards announced Oct. 31 by the Centers for Medicare & Medicaid Services (CMS).

If you’re a longtime listener of Monitor Mondays, you might recall that our early broadcasts were filled with a lot of speculation about what would happen following the RAC demonstration program. As the first RACs were rolled out, our speculation turned to coverage of the rollout, region by region, of the provider education component. In fact, one of my first articles for RACmonitor discussed the “RAC Not-So-Open Door Outreach Policy,” whereby providers that did not belong to a state medical society or hospital association found it difficult, if not impossible, to attend (in person or via webinar) the important rollout sessions.

As the new round of RACs is set to roll out, even the most experienced hospital RAC response teams will be eager to understand the challenges we face ahead.

The new-era RACs will still be paid on contingency, but based upon the type of recovery: automated review, complex review, CMS referral, and extrapolation. CMS is requiring the RACs to defend their improper payment determinations throughout the appeals process, including taking “party” status on 50 percent of cases that reach the backlogged administrative law judge (ALJ) schedule, as regularly reported on Monitor Mondays broadcasts.

Some questions to be answered include:

  1. Will the educational sessions be transparent, and available to all provider types? Will recordings and FAQs from the sessions be available, and outline key elements of the new RAC program?
  2. Will the rollout start with a level of automated reviews, then progress to DRG validations? Will they then proceed on to medical necessity reviews to give providers and the RACs a time to ease into the process?
  3. Have the RACs upgraded the technology on their websites to allow for easier search terms as the number of approved issues grows over time?
  4. Will the communication problems between the RACs and the Medicare Administrative Contractors (MACs) on recoupment be solved?
  5. How will providers handle the additional documentation request (ADR) limits under the new program? How will the new adjusted ADR limits (based upon a provider’s error rate) be applied? Will the ADR limits be a moving target, as they were in the previous RAC program?
  6. How will the extrapolation for low-dollar claims work (CMS is encouraging extrapolation)? What are providers’ obligations under the FCA?
  7. Will the new durable medical equipment (DME), home health (HH), and hospice national RACs spell the demise of legitimate programs, particularly those caught in the troublesome rollout of the prepay review (hint: Illinois)?

This Monday, Nov. 7, we will begin yet another new era on Monitor Mondays with an hour-long special broadcast. Join Chuck Buck and me (here from the beginning) and our other guests. Don’t forget to bring your questions.

About the Author

Nancy Beckley is founder and president of Nancy Beckley & Associates LLC, providing compliance planning and outsourced compliance services to rehab providers in hospitals, rehab agencies, and private practices. Nancy is certified in healthcare compliance by the Healthcare Compliance Certification Board. She is on the board of the National Association of Rehabilitation Providers and Agencies. She previously served on the CMS Professional Expert Technical Panel for Comprehensive Outpatient Rehabilitation Facilities. Nancy is a familiar voice on Monitor Mondays, where she serves as a senior national correspondent.

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