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What does RAC mean to case managers?

Case Management Weekly, June 4, 2008

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The Recovery Audit Contractor (RAC) program, an initiative identified by the Tax Relief and Health Care Act of 2006, was engineered by CMS with the primary purpose of reducing improper payments to hospitals. The first demonstration project, which took place during a three-year period, included three states: New York, California, and Florida. RACs conducted an audit of processed claims.

In the initial 2006 RAC demonstration project, CMS generated approximately $289 million in overpayments, $10.4 million in underpayments, and $2 million in contingency fees. However, this financial gain for Medicare is not accurate because many of the claims were denied or are in the denial process.

The national focus for inpatient chart reviews focused on complex debridement, respiratory failure, and medical back pain. After the initial RAC project, the next targeted state was Massachusetts earlier this year.

Check out the May 2008 issue of Case Management Monthly to get the full story, and discover all the benefits of being a Case Management Monthly subscriber.

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