On September 16, 2011, CMS published a final rule to implement section 6411 of the ACA, which requires all states to contract with Recovery Audit Contractors (RACs) to audit Medicaid claims, identify underpayments and overpayments, and recover overpayments or correct underpayments (similar to the Medicare RAC program). RACs will be paid a contingency fee out of improper payments they recover that took place in the previous three years. The rule provides guidance to states related to federal/state funding of state start-up, operation and maintenance costs of Medicaid RACs, and the payment methodology for state payments to Medicaid RACs. States are required to assure that adequate appeal processes are in place for providers to dispute adverse determinations made by Medicaid RACs. In addition, the rule directs states to coordinate with other contractors and entities auditing Medicaid providers and with state and federal law enforcement agencies. The rule is effective January 1, 2012.