Medi-Cal: New Recovery Audit Contractor Program

The Department of Health Care Services (DHCS) is issuing notice to all California Medi-Cal providers of the Recovery Audit Contractor (RAC) Program. The Patient Protection and Affordable Care Act requires that states and territories establish Medicaid RAC programs. The RAC program’s purpose is to identify and correct improper Medicaid payments through the collection of overpayments and reimbursement of underpayments. DHCS has contracted with Health Management Systems, Inc. (HMS) to act as the RAC for the State of California. HMS will perform desk and field audits for selected fee-for-service Medicaid claims paid within the last three years. HMS will contact the providers whose claims have been selected for review for the RAC audit. After the initial contact, providers may receive letters from HMS requesting medical records for further review. Failure to comply with the medical records request from HMS will be considered an error and may result in an overpayment recoupment.