In early October, the CMS announced the permanent Recovery Audit Contractor (RAC) program. The demonstration RAC program has resulted in the collection of almost $1 billion in overpayments and the return of almost $38 million in underpayments. Providers, such as hospitals, nursing homes, suppliers and physician practice groups that bill Medicare Parts A and B will be subject to RAC audits. Each RAC will have exclusive jurisdiction in its region for the RAC audits of Medicare claims that have not been reviewed by other Medicare contractors for payment issues. The new permanent RACs will continue to be paid on a contingency fee basis for both overpayments and underpayments.

RAC contracts were awarded as follows:

  • Diversified Collection Services, Inc. for Region A: Connecticut, Delaware, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont;
  • CGI Technologies and Solutions, Inc. for Region B: Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio and Wisconsin;
  • Connolly Consulting Associates, Inc. for Region C: Alabama, Arkansas, Colorado, Florida, Georgia, Louisiana, Mississippi, New Mexico, North and South Carolina, Oklahoma, Tennessee, Texas, Virginia and West Virginia; and
  • HealthDataInsights, Inc. for Region D: Alaska, Arizona, California, Hawaii, Idaho, Iowa, Kansas, Missouri, Montana, Wyoming, Nebraska, Nevada, North and South Dakota, Oregon, Utah and Washington.

Protests by two contractors that unsuccessfully bid to be part of the RAC program have resulted in the temporary suspension of all RAC activities, however. The Government Accountability Office is the agency tasked with resolving the protests and has 100 days within which to issue its decision. For more information on the RAC program, please click here.