Understanding Medicare RAC Audits

Published: 2011-06-30 11:51:43
Author: Jennifer Kirschenbaum and Rachel Weinrib | Dynamic Chiropractic | July 15, 2011

If you treat Medicare beneficiaries, you will in all likelihood eventually meet one of Medicare's Recovery Audit Contractors, otherwise known as RACs Recovery Audit Contractors are Medicare third-party contractors engaged for the sole purpose of identifying services provided by doctors that do not meet the many documentation requirements now required by Medicare for reimbursement.

It is important to note up front that RACs are compensated based upon the amount of improper reimbursement they identify received by a practitioner as paid by Medicare. Of course, such an incentive drives the RACs to interpret documentation requirements against the practitioner's favor. Another noteworthy factor is that Medicare's bureaucratic process often creates an unbalanced playing field in any RAC dispute. For these reasons, it is imperative that as a provider of services for Medicare beneficiaries, you be aware of your rights and the defenses available to protect your practice should you find yourself under review.

The Review of Records

Typically, a RAC would contact your practice by letter, requesting that you send records to their attention for review. What the RAC is doing is looking at records for which you have already been reimbursed to see where payments may have been made that are not substantiated by your documentation techniques.

The rationale behind the review process is that every time a claim is submitted to Medicare for reimbursement, you are submitting a bill to the government; the government does not confirm receipt of services rendered to the extent that such services are truly verified at the time of payment. Post-payment reviews are a sampling of services rendered to verify fair consideration has been received.

The main problem with post-payment reviews is that documentation requirements for initial and subsequent visits are equivalent to large haystacks; and the closer you look, the more pins you will find in the stack. In this metaphor, the pins represent documentation gaps or errors. At the end of the day, no matter how good your documentation may be, held under a big enough microscope, mistakes may be found.

After you have submitted your records for review, the next step in this process is a letter from the RAC detailing their findings and identifying your documentation errors. This letter will also state an amount of money requested to be returned to Medicare for those services that were paid, but not substantiated.

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