Recovery Audit Contractor (RAC) Demonstration High-Risk Vulnerabilities No Documentation or Insufficient Documentation Submitted

This is the first in a series of articles that will disseminate information on RAC high dollar improper payment vulnerabilities. The purpose of this article is to provide education regarding RAC demonstration-identified vulnerabilities in an effort to prevent these same problems from occurring in the future. With the expansion of the RAC Program and the initiation of complex medical review (coding and medical necessity) in all four RAC regions, it is essential that providers understand the lessons learned from the demonstration and implement appropriate corrective actions.

Each RAC is responsible for identifying overpayments and underpayments in approximately one quarter of the country.

Two of the high risk vulnerabilities identified during the RAC demonstration include:

  • Provider non-compliance with timely submission of requested medical documentation; and
  • Insufficient documentation that did not justify that the services billed were covered, medically necessary, or correctly coded.

Medical Documentation Reminders:
CMS reminds providers that medical documentation must be submitted within 45 days of the date of the Additional Documentation Request (ADR) letter.
Preparing for RAC Audits:
CMS recommends providers implement a plan of action for responding to RAC ADR letters. This could involve developing a RAC team to coordinate all RAC activities that may include tracking audit and appeal findings, identifying patterns of error, implementing corrective actions, etc.

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