Billing Beat

Recovery Audit Contractors continue implementation

May 1, 2009

CMS has taken the next steps in the agency’s comprehensive efforts to identify improper Medicare payments and fight fraud, waste and abuse in the Medicare program by awarding contracts to four permanent Recovery Audit Contractors (RACs). Congress required a permanent and national RAC program to be in place by January 1, 2010. The national RAC program is the outgrowth of a successful demonstration program that used RACs to identify Medicare overpayments and underpayments to health care providers and suppliers in California, Florida, New York, Massachusetts, South Carolina and Arizona. The demonstration resulted in over $900 million in overpayments being returned to the Medicare Trust Fund between 2005 and 2008 and nearly $38 million in underpayments returned to health care providers. Each RAC will be responsible for identifying overpayments and underpayments in approximately 25% of the country. Presently 18 states are covered under the program. Additional states will be added to each RAC region in 2009.

The 4 new RACs will be in place by 2010:

  • Diversified Collection Services, Inc. of Livermore, California, in Region A, initially working in Maine, New Hampshire, Vermont, Massachusetts, Rhode Island and New York with expansion during 2009 to PA, MD, DE, NJ and CT.
  • CGI Technologies and Solutions, Inc. of Fairfax, Virginia, in Region B, initially working in Michigan, Indiana and Minnesota with expansion during 2009 to IL, WI, KY, and OH.
  • Connolly Consulting Associates, Inc. of Wilton , Connecticut, in Region C, initially working in South Carolina , Florida , Colorado and New Mexico with expansion during 2009 to TX, OK, AR, LA, AL, MS, TN, GA, NC, VA, and WV.
  • HealthDataInsights, Inc. of Las Vegas, Nevada, in Region D, initially working in Montana , Wyoming , North Dakota , South Dakota , Utah and Arizona , with expansion during 2009 to CA, NV, WA, OR, ID, KS, NE, IA, MO, AK, and HI.

The new RACs were selected under a full and open competition. The RACs will be paid on a contingency fee basis on both the overpayments and underpayments they find.

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