Health Information Management

News: Senate bill to increase RAC scope

CDI Strategies, November 26, 2009

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The Senate Healthcare Reform Bill includes a proposal for expanding the RAC program. Specifically, Section 6411 of the Patient Protection and Affordable Care Act (H.R.3590, p. 1777–1783) broadens the current RAC program to cover Medicare Part C and D as well as the Medicaid program by December 31, 2010.
Similar to the current Medicare RAC program, the Medicaid RACs would be paid by contingency fee to identify under- and overpayments, and would recoup those overpayments. States would contract with one or more RACs to seek out payment errors, and each state must have “an adequate process for entities to appeal any adverse determination made by such contractors,” according to the Healthcare Reform Bill.
“Certainly we will need some additional details on how this will work,” says Kimberly Anderwood Hoy, JD, CPC, director of Medicare and compliance for HCPro, Inc. “The complexity of the individual state Medicaid plans will make this difficult to coordinate at the federal level.” 
The Patient Protection and Affordable Care Act also provides several new requirements for contractors involved in the RAC program for Medicare Parts C and D. Per the Bill, RACs must:
  • Ensure each Medicare Advantage plan under Part C and each Part D prescription drug plan have an anti-fraud plan in effect, and review the effectiveness of that plan.
  • Examine claims for reinsurance payments under section 1860D–15(b) of the Social Security Act to determine whether prescription drug plans submitting the claims incurred costs greater than those allowable under paragraph 2 of the section.
  • Review estimates submitted by prescription drug plans by private plans regarding the enrollment of high cost beneficiaries, and compare them with the numbers of such beneficiaries actually enrolled.
The expansion of the RAC program to Medicare Parts C and D doesn’t surprise Hoy. “Providers have actually been asking whether RACs would audit Part C claims because they feel they are paid incorrectly a lot of the time.”
But that doesn’t mean the program is a no-brainer. For one thing, it is unclear how RACs, which are paid by contingency fee, would be paid for ensuring the presence of anti-fraud plans, says Hoy. “There’s no dollar amount attached. So what would they get paid for, and how much would they receive?”
In addition, the Bill will require the Secretary of HHS, through the CMS Administrator, to submit an annual report to Congress on the effectiveness of the Medicare and Medicaid RAC program, along with recommendations to expand or improve the program.

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