Health Information Management

Q/A: Medicaid RACs

APCs Insider, November 12, 2010

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Q: Someone told me that our state Medicaid agency is going to be starting a Recovery Audit Contractor program. I thought that was only for Medicare. Is this a nationwide program?

A: CMS released the proposed rule for Medicaid recovery audit contractors (RAC) November 5, with April 2011 targeted as the implementation date.

CMS created the Medicaid RAC initiative as part of the Patient Protection and Affordable Care Act designed to identify waste, fraud, and abuse in the healthcare system by reducing improper payments. States must establish Medicaid RAC programs by submitting state plan amendments to CMS by December 31, and fully implement their programs by April 1, 2011, according to the proposed rule.

Providers should distinguish the overall Medicaid RAC program from the Medicare RAC program and note the differences in the appeals process. In the case of Medicare, the appeals process is laid out very clearly no matter which state you are in and providers have the opportunity to present the case to an arbiter. With the Medicaid RAC program, the states manage the appeals process, meaning it will likely vary from state to state.

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