At the recent American Health Lawyers Association's Institute on Medicare and Medicaid Payment Issues conference, the Centers for Medicare & Medicaid Services (CMS) officials provided insight into future Recovery Audit Contractor (RAC) plans for the coming year, including an effort to move away from the term RAC to Recovery Auditor and plans to update the CMS website.

In troublesome news for providers, RACs will be encouraged to flex their atrophying extrapolation muscles. RACs always have had the ability to extrapolate overpayments, even during the demonstration project, but traditionally have failed to exercise that right. Officials at the conference indicated that RACs will be actively encouraged to take advantage of their ability to extrapolate overpayments within the coming year. Extrapolation uses sampling of a specific set of statistics to project a global error rate to a universe of claims to determine overpayment amounts made to a facility. The focus supposedly will be on small dollar claims identified in the Comprehensive Error Rate Testing (CERT) program. RACs thus will be following in the footsteps of their bigger, badder cousins, Zone Program Integrity Contractors (ZPICs), who routinely extrapolate overpayments to the tune of millions of dollars. Accordingly, providers will need to reevaluate their defense strategies in light of these coming changes: a single $200 claim denial, which previously may not have been cost-effective to defend, suddenly may have multiplier implications which could cost providers significantly more.

CMS officials also shared predictions regarding RAC involvement in appeals. Generally, RACs have avoided involvement as parties or participants in appeals; providers thus had the benefit of the strategic position of arguing against no one because the opposing side rarely showed up. CMS officials indicated that this will change and that RACs will become involved in appeals in the coming year, particularly at the administrative law judge level. This is further evidence in support of providers continuing to review their response and defense strategies against evolving RAC actions.