The errors identified by recovery audit contractors (RACs) will likely soon be used by U.S. attorneys to identify possible false claims cases. While RAC audits can only review a maximum of three years of claims, the False Claim Act allows U.S. attorneys to pursue claims up to 10 years old in certain situations. Consequently, the results of a RAC audit are a great source for U.S. attorneys to begin a false claims case without much effort. If the alleged overpayments identified by the RAC extend back to the beginning of the three-year RAC review period, the U.S. attorney will likely suspect that such overpayments also occurred before the beginning of the three-year RAC period. Hence, an investigation by the U.S. attorney will likely begin and possible false claims violations may be discovered and investigated.
Currently, the U.S. Attorney's Office in the Western District of New York is using the results of Medicare administrative contractor (MAC) audits to identify possible false claims cases. Due to the similarity between the MAC audits and the RAC audits, U.S. attorneys will likely use the results of RAC audits to also identify possible false claims violations.
Due to the likely use of the RAC audit results by U.S. attorneys, hospitals responding to RAC audits need to be careful of the information they submit. Currently, many hospitals do not realize that the information submitted to a RAC auditor may ultimately be reviewed by a U.S. attorney searching for false claims violations. As a result, hospitals should conduct a thorough review of the information to be submitted to RACs, prior to submitting such information. Such review should not be limited to RAC-specific issues, but should also focus on other risk factors such as potential liability under the False Claims Act, the Anti-Kickback Statute and Stark Act. Due to the longer statute of limitations under the False Claims Act, the period reviewed may also need to be greater than the term of the RAC request. In addition, hospitals should retain all documentation submitted pursuant to a RAC request to assist with potential future appeals of the RAC determinations.