Recovery Audit Contractor Information

Recovery Audit Contractors (RACs) are companies that contract with CMS to find improper payments (both overpayments and underpayments) that may have been made to Medicare providers. Section 302 of the Tax Relief and Health Care Act of 2006 made the RAC Program permanent. RACs review claims on a post payment basis. There are two types of reviews conducted by RACs:

• Automated (no medical record needed)
• Complex (medical record required)

RACs have begun to perform complex reviews and send providers requests for documentation. Upon receipt of such a request, providers have 45 days to respond to ensure proper review of documentation. The RAC will not review a claim that has previously been reviewed by another entity. They analyze the claim data using their proprietary software and identify claims that clearly contain improper payments. If an improper payment is identified, they will issue a demand letter.

Source: https://www.noridianmedicare.com