The Medicare Recovery Audit Contractor (RAC) program is designed to identify improper Medicare payments - both overpayments and underpayments. RACs are paid on a contingency fee basis, receiving a percentage of the improper overpayments and underpayments they collect from providers.
Audits may cover up to the prior three years of provider claims. The scope of the audit may include ambulance, durable medical equipment, hospital inpatient and outpatient, laboratory, physician, and skilled nursing facility services. Payment errors often involve duplicate payments, fiscal intermediaries' mistakes, medical necessity, and coding.
While many RACs have focused primarily on hospitals, American Medical News reports that CMS will direct the auditors' scrutiny of physician practices as well. The specific targets for these audits will include the so-called high-level patient evaluation code.
John Howley, Esq.
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