Recovery Audit Contractor (RAC) Program
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Background
The Tax Relief and Health Care Act of 2006 made permanent the Medicare Recovery Audit Contractor (RAC) program to identify improper Medicare payments - both overpayments and underpayments-in all 50 states. RACs are paid on a contingency fee basis, receiving a percentage of the improper overpayments and underpayments they collect from providers.
RACs may review the last three years of provider claims for the following types of services: hospital inpatient and outpatient, skilled nursing facility, physician, ambulance and laboratory, as well as durable medical equipment. The RACs use proprietary software programs to identify potential payment errors in such areas as duplicate payments, fiscal intermediaries' mistakes, medical necessity and coding. RACs also conduct medical record reviews.
From March 2005-March 2008 the RAC program operated as a demonstration program and in July 2008, the Centers for Medicare & Medicaid Services (CMS) reported that the RACs had succeeded in correcting more than $1.03 billion in Medicare improper payments. Approximately 96 percent ($992.7 million) of the improper payments were overpayments collected from providers, while the remaining 4 percent ($37.8 million) were underpayments repaid to providers.
As required by The Tax Relief and Health Care Act of 2006, the permanent RAC program is now implemented in all 50 states.
On this site, you will find the latest information on the permanent RAC program, AHA's advocacy efforts and educational activities. You also will find information about and links to RACTrac, a Web-based survey and claim level tool that will collect data on a quarterly basis to help you identify RAC vulnerabilities in your hospital and assist AHA in our advocacy efforts.
If you have additional questions or concerns, please contact the AHA at RACinfo@aha.org. To be kept up to date on the latest RAC news, if you are an AHA Member, join AHA's RAC News Group. Click here to enter your contact information.
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Related RAC Resources