Houston partner Scott McBride and associate Summer Swallow co-authored an article, "Medicare Recovery Audit Contractors: RAC'ing in the Money," which was published in the April 30, 2009, edition of the Bureau of National Affairs' Health Law Reporter.
According to McBride and Swallow: "Knowing that few will be spared from the financial impact of the Medicare recovery audit contractor (RAC) permanent program, providers nationwide are scrambling to prepare themselves for the inevitable medical records requests and/or demand letters that are soon to arrive. To better appreciate the possible effects of the RAC permanent program, providers should endeavor to examine both the history and direction of the program. Congress authorized the RAC demonstration in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) for the purpose of identifying past inaccurate payments under the Medicare fee-for-service program. Over the course of the three-year demonstration, the RACs identified more than $1.03 billion in improper payments."
The authors go on to detail the process RACs must follow when attempting to identify improper payments—a "targeted review," which employs data analysis techniques in order to identify those claims most likely to contain overpayments, the role Centers for Medicare and Medicaid Services (CMS) will play in the types of audits selected by the RACs, and the appeals process health care providers must navigate if they wish to overturn an RAC's adverse determination.
McBride and Swallow conclude: "When deciding on what action to take when the demand letters arrive, providers should consider that approximately one third of those providers who chose to appeal determinations made during the demonstration program were successful. As providers ready themselves for RAC implementation, there are a number of preparations that should be made, including identifying where improper payments have been persistent by reviewing the RACs' Web sites and identifying any patterns of denied claims within the provider's own practice or facility. In order to prepare for the inevitable, providers should consider establishing an interdisciplinary taskforce that meets regularly in order to establish communication channels and loops to review RAC requests, findings, and appeals, and monitor updates by CMS."