RAC Audit Process
Navigating a Recovery Audit Contractor (RAC) audit requires due diligence, as well as knowledge of laws and regulations if a health provider is to avoid being charged for overpayments that were erroneously assessed. Retaining qualified legal counsel is a critical part of the process. In fact, failure to leverage the knowledge of a qualified attorney can be costly. An attorney can also help you complete required documentation in accordance with best practices and a keen understanding of common pitfalls that should be avoided.
Some of the most common issues that exist with RAC audits is the provision of inaccurate or incomplete information. Another problem that occurs is a failure to submit responses in a timely manner. These are all mistakes that have proven to be detrimental to health care providers. As a result of recent governmental changes, there are a greater number of requests for overpayment in response to RAC audits. Appealing a ruling is no easy task because of ever-changing laws and regulations.
For a variety of reasons, it may be necessary to seek out assistance from a health care statistician if you have received a demand to return an overpayment. There might even be an opportunity to have a statistician serve as an expert witness if you appeal the RAC audit finding. Having an expert with knowledge of coding and billing can go a long way, especially if the payment is for a large sum.
Since RACs are private companies contracted by the Centers for Medicare and Medicaid Services (CMS), they are motivated to identify overpayments. While they might have good intentions, sometimes what’s uncovered isn’t necessarily accurate. Although the audits are for the purpose of detecting fraudulent activities, it’s worth noting that RACs are actually paid a percentage of the money they recover.
As with any business requirement that might be costly, due diligence is important. This couldn’t be more true as it relates to RAC audits, which is why securing counsel is so important. In fact, it should be a priority to contact an attorney the minute you receive notice of an audit. There is currently an increased amount of pressure for states to recover funds as a result of budgetary deficits. There are even some instances when an attempt to uncover fraud or recover overpayments from health providers results in audits that are inaccurate.
An RAC audit involves the use of formulas to determine if a claim paid for a particular procedure was allowed. The information obtained is extrapolated, which can result in a bill for overpayment exorbitantly high, yet based on inaccurate information. There are also significant fines associated with overpayment and the laws in some states require repayment to occur within 30 days. There’s also the possibility of having to pay additional fines for not submitting the right documentation.
In the event that the RAC audit is incorrect, there is an administrative hearing that gives you a chance to prove that no errors were made in the initial application of the funds. This hearing enables you to demonstrate that you were in fact entitled to the amount billed and received. A qualified attorney will have the knowledge and expertise to navigate the hearing, while ensuring adherence to all requirements.
It’s more common than not for audits to result in a provider being assessed a significant amount of money in overpayments. This is why the appeals process is likely to be necessary. Having counsel engaged from the beginning is the best way to protect your practice. An attorney will have the knowledge and expertise needed to secure the best possible outcome.