Revenue Cycle

Understanding and Avoiding RAC Fraud

Recovery Auditor Report, March 4, 2010

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While RACs are not responsible for reviewing claims for potential fraud, they are responsible for referring to CMS any potentially fraudulent instances found during those reviews.
 
During the RAC demonstration project, one RAC reported referring two cases of potential fraud it uncovered to CMS, even though CMS reported no provider-specific referrals, according to a February 2010 OIG Report, “Recovery Audit Contractors’ Fraud Referrals”. Another demonstration project RAC notified CMS of multiple claims from Florida providers “involving millions of dollars in improper payments to physician practices for Intravenous Immune Globulin treatments,” though it did not formally refer the potential fraud to CMS. In addition, the report states that CMS directed the RACs to cease reviewing the claims and that it did not track the outcomes of any of the referrals it received from RACs.
 
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