Return of the RACs – How to Prepare for RAC Audits & What to Know

As the nation forges ahead in the wake of the COVID-19 pandemic, programs like the Medicare Fee for Service (FFS) Recovery Audit Program have also restarted after a brief hiatus that started in March 2020 during the Public Health Emergency. Today, Recovery Audit Contractors (RACs) are back to business reviewing claims on a post-payment basis, and while their goal is not to increase healthcare provider’s burden with audit responses, staffing reductions have many hospitals scrambling.

Below, we cover what you should know about these upcoming RAC audits, and we also explore the steps you can take to best prepare.

What is a Recovery Audit Contractor?

The Recovery Audit Contractor, or RAC, program was created through the Medicare Modernization Act of 2003 to detect fraud, waste, and abuse by reviewing medical records with the goal of identifying and recovering improper Medicare payments made to healthcare providers. The RAC program divides the United States into four regions and includes a fifth region for nationwide Durable Medical Equipment (DME) and Home Health / Hospice (HHE) claims.

Led by the Centers for Medicare & Medicaid Services (CMS), the goal of RAC audits is to identify and correct improper payments through the detection and collection of overpayments made on claims for healthcare services provided to Medicare beneficiaries. They also work to identify underpayments to providers so that CMS can proactively implement actions to correct future improper payments across all 50 states.

What Does a Recovery Audit Contractor Do?

In 2018, the RAC program identified approximately $89 million in overpayments and recovered $73 million. Since 2009, the program has recouped more than $10 billion for the Medicare program

To accomplish these feats, the RAC program employs a variety of different types of audits that seek to identify and recover improper payments across 16 different Medicare programs (e.g., Inpatient Hospital, Outpatient Imaging). Most of these claims are paid by the federal government to providers in the form of overpayments based on erroneous information provided by facilities or providers for designated services received by beneficiaries.

Each audit claim contains two components:

1) A payment component which includes monies owed to providers

2) A recovery component which allows companies conducting the audits to recoup some of the cost of conducting the target audits

Any medical provider that submits claims to a government program may be subject to a Medicare Recovery Audit Contractor audit. RAC audits are not one-time or intermittent reviews and can be triggered by anything from an innocent documentation error to outright fraud. They are part of a systematic and concurrent operating process that ensures compliance with Medicare’s clinical payment criteria, documentation and billing requirements.

How to Prepare for RAC Audits

While reduced staff, high patient loads or other challenges may be bogging down your team, it’s important to remember that timeliness is crucial for CMS audit responses.

Locating the corresponding medical records and information can be a hassle at the best of times, but there are a few key things your organization can do to better prepare for a RAC Audit:

  1. According to the Centers for Medicare & Medicaid Services (CMS), if selected for review, providers should discuss with their contractor any COVID-19-related hardships they are experiencing that could affect audit response timeliness. CMS notes that all reviews will be conducted in accordance with statutory and regulatory provisions, as well as related billing and coding requirements. Waivers and flexibilities will also be applied if they were in place on the dates of service for any claims potentially selected for review.
  2. Ensure that the RAC for your region has the appropriate contact information for requesting audit-related documentation. With so many changes to hospitals teams, it’s important to make sure that RAC requests for medical records are actually making it to the correct person or team in a timely manner.
  3. Review the CMS website. Make note of the Approved and Proposed RAC Topics and ask questions about those you don’t fully understand.
  4. Provide your internal audit review teams with proper access to data and other software tools like those used to ensure timely electronic audit responses. With a mix of teams working from home and in the office, it’s a good idea to make sure that teams handling Additional Documentation Requests (ADRs) and audit responses have the necessary access to the data they will need to respond to requests.
  5. Review and document any changes to your audit review team processes.
  6. Meet with your teams to ensure they fully understand the processes and are poised to respond within the required timeframes.
    Successfully completing these audits in a timely manner is made much easier when the above processes and steps are in place.

Organized & Audit-ready With Vyne Medical

With proper preparation, a team that understands the process, and the right tools, audits can go more smoothly for both your organization and the RAC.

One such tool for improving RAC audit responses is the Refyne™ platform from Vyne Medical. With Refyne, you can automate and improve your Medicare audit management processes with ease.

Refyne is:

• Streamlined: Audit response teams can easily access the cloud-based Refyne portal – from the office or remotely – and leverage a single workflow for digital documentation upload

• Transparent: Eliminate discrepancies in response submission timelines with evidence of the dates audit responses were received by both CMS and the designated audit contractor

• Efficient: Respond more quickly and efficiently for fewer denials and a reduction in missed appeal deadlines

If you’re ready to get started on your RAC audit prep, ask how Vyne Medical can help automate audit request and response workflows for your organization!



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