Senate to Look into Potential Medicare Contractor Conflicts

March 2, 2011 · Posted in Industry News, RAC · Comment 

Three Senate committee chairmen asked the Department of Health and Human Services Inspector General to look into potential conflicts of interest among private sector contractors that perform many of the payment, administration and oversight functions of Medicare.

The chairmen say that a recent survey of contractors conducted by their staffs to examine problems within the Medicare program identified several relationships between key Medicare contractors “that raise questions about possible conflicts of interest, or at the very least, might present the appearance of a conflict of interest.”

In some instances, the oversight contractor is a subsidiary of a company with a Medicare claims processing contract; in other instances, the claims contractor is a subsidiary of a parent company that also has a subsidiary with an oversight contract.

Congressional staffers said they have been reviewing the relationship of subsidiaries of WellPoint Inc., Hewlett Packard Co’s EDS Corp., and several other Medicare contractors hired by the government to monitor the bills healthcare providers send to Medicare, according to media reports.

[Extracted from: Fierce Healthcare]

AHA Reports Uptick in RAC Activity

September 29, 2010 · Posted in RAC · Comment 

This article at says that Medicare’s recovery audit contractors are keeping up pressure on claims denials, according to a new survey by the American Hospital Associations.

AHA’s voluntary RACTrac survey on Medicare recovery audit contractor activity has reported $19.2 million in denied claims during the second quarter of 2010, including $11 million in Medicare Region C, according to data compiled by RACTrac. The region, which comprises the Southeastern U.S., represents about 36 percent of the RACTrac participants.

Most of the denials–both automated and complex–came from coding and billing errors. Altogether, about 16 percent of the RAC denials that may be appealed have been appealed. About $421,000 worth of denials have been overturned.

The data is among the first reported by RACTrac, which became active in January 2010. According to the AHA, 1,389 hospitals are participating. Of those, 972 facilities–or 70 percent–have reported RAC activity. Most of those are non-teaching hospitals with 200 or fewer beds.

Click here to read about four areas that Directors of Rehabilitation can automate to be better prepared for RAC audits and to drive outpatient rehabilitation revenue using Chart Links Rehabilitation Software.

CMS Announces Series of Nationwide RAC 101 Calls

April 7, 2010 · Posted in RAC · Comment 

The Centers for Medicare and Medicaid Services (CMS) has announced a series of “Nationwide RAC 101 Calls.” The calls, open to the public healthcare community, are scheduled for late April and early May as follows:

  • April 28, 2010 1:00pm – 2:30pm EST: Nationwide RAC 101 Call, 1-877-251-0301
  • May 4, 2010 1:00pm – 2:30pm EST: Nationwide RAC 101 Call for Home Health and Hospice Providers, 1-877-251-0301
  • May 5, 2010 1:00pm – 2:30pm EST: Nationwide RAC 101 Call for DMEPOS, 1-877-251-0301
  • May 12, 2010 1:00pm – 2:30pm EST: Nationwide RAC 101 Call for Physicians, 1-877-251-0301

For updated call schedule information, go to

RAC: CMS Approved Audit Issues Posted

September 24, 2009 · Posted in Industry News, RAC · Comment 

To see the Recovery Audit Contractor (RAC) CMS-approved audit issues, visit Connolly Healthcare’s website.  Connolly is the RAC Contractor for Region C.  The CMS Approved Audit Issues are for hospital outpatient facilities and physicians. 

According to the National Association of Rehab Providers and Associations (NARA), the first set of approved issues includes outpatient rehab in the mix, and the source of the issues comes straight from the finding in the RAC demonstration project in California and New York.  In the demonstration project $3.2 million of claims for speech evaluation were found to be billed in error as time-based codes, rather than as service-based codes. The Speech evaluation code may only be billed as a unit of “1″. The same is also true for physical therapy evaluation and occupational therapy evaluation codes.

MACs + RACs = Audits

September 9, 2009 · Posted in RAC · Comment 

Both RACs and MACs audit providers to ensure that they’re paid correctly for services provided.  But once a MAC audits a service, a RAC cannot. And vice versa. So, does that mean there might be a little friendly competition between them that could result in more audits for providers?  This article written by Andrea Kraynak for HealthLeaders Media explores that notion.

Recovery Audit Contractor (RAC) Program Underway

September 2, 2009 · Posted in occupational therapy, physical therapy, RAC, Speech Therapy · Comment 

The Recovery Audit Contractor (RAC) program is under way, and outpatient rehabilitation and CORF/OPT services are now subject to review. The program, a wide-ranging cost-containment plan, is expected to cut improper payments in Medicare programs and identify ways to diminish or eliminate altogether any future improper payments, which may include payments for services that are not covered, coded improperly, or duplicate charges. The Centers for Medicare and Medicaid Services (CMS) plan to expand the program to all 50 states over time (visit to view the schedule).

Outpatient rehab is within the first set of CMS-approved audit issues. The speech evaluation code, and physical therapy and occupational therapy evaluation codes, can only be billed as a unit of “1.” In the section on Timed and Untimed Codes, CMS provides numerous examples of appropriate billing methods.

Provider outreach must occur within a state before any reviews can take place. Connolly Healthcare, which is contracted to perform recovery audit services in Region C, is the first of the four contractors to hold the mandated town hall meetings (visit this site for more information:

To prepare for a review, physical and occupational therapists should conclude whether they have billed evaluation and/or service-based codes erroneously. If their internal audit finds billing errors, they need to find, via their compliance program, the procedure for making a voluntary refund or perhaps a self-disclosure. Those who feel they may have difficulties may wish to perform the audit through attorney-client privilege.

For more information, visit the Web sites for the RAC jurisdictions, as follows: Region A: Diversified Collection Services (, Region B: CGI (, Region C: Connolly Consulting Inc (, and Region D: HealthDataInsights Inc (no Web site yet;

Source (verbatim): Rehab Management’s RehabToday enewsletter dated 08/27/09

RAC Review Phase-in Strategy from CMS

July 14, 2009 · Posted in RAC · Comment 

Wondering when the Medicare Recovery Audit Contractors (RAC) will begin auditing?  The Centers for Medicare and Medicaid Services (CMS) released downloadable information in late June on their RAC web page that lets providers know when auditing will occur in various areas of the country.  For more details, take a look at the CMS RAC Review Phase-in Strategy (as of 06/24/09) document.

Conveying RAC Review Determinations

June 17, 2009 · Posted in RAC · Comments Off 

If you’re questioning exactly how RAC review determinations are going to be conveyed, you should read this blog post by Carla Engle, MBA, whose background includes years of experience in hospital reimbursement and billing functions.  In the post, Engle clarifies how the Medicare Recovery Audit Contractors’ (RAC) review results letters and demand letters will notify providers of the determination and collection process. 

Processes are covered for

  • automated claim reviews
  • complex claim reviews (where medical records and/or additional documentation are requested and reviewed)

CMS Releases 14 New RAC FAQs

June 12, 2009 · Posted in Industry News, RAC · Comment 

The Centers for Medicare and Medicaid Services (CMS) recently released fourteen new Recovery Audit Contractor (RAC) responses to frequently asked questions.   Access the entire list of RAC FAQs at the CMS website.