5 new contracts for controversial recovery audit contractor program of Medicare have been awarded by CMS recently.
Performant Recovery and Cotiviti are the proposed awardees, which will both operate in 2 areas in the U.S., and HMS Federal Solutions. Veteran contractor CGI Group won’t return and it is not clear if the company re-bid.
The recovery audit contractors comb through medical records at hospitals and offices of doctors and search instances of where Medicare is paying a lot of money. The CMS pays RACs a contingency fee every time they recognize an overpayment. In accordance to the providers, the program develops an unimportant administrative burden and ties up payments for months or years due to massive backlog of requests and appeals.
But for the federal government, the payment has scored big. According to CMS, RACs have regained or recouped $8 billion in inaccurate payments since the program initiated in the year of 2009.
The RAC program of Medicare has been in flux since previous year. Agreements with the current vendors were decided to expire in February 2014 but were extended many times because of several technical issues. CGI filed suit over changes to how RACs are paid during these agreement extensions. Now just after the challenge of provider has passed the 2nd level of a 5-level appeal process, RACs receive payment.
RACs get payment in less than forty-five days under the last agreements. Providers mostly appeal decisions against them and entering into the second level of the procedure can take anywhere from 4 months to more than a year.
Emily Evans, a legislative analyst at Obsidian Research Group who tracks Medicare’s program said, “due to these changes, potential RACs will certainly submit proposals with contingency amounts as high as twenty percent in contrast to the current rates of between 9.5 percent to 12 percent.”
RACs must follow latest audit timelines proposed and provided by the CMS in the year of May 2015 under the new agreements. Initially, RACs could analyze and review inpatient claims that are upto 3 years old. But now claims cannot be more than 6 months old.
The CMS also claimed that RACs would no longer be the first to review shorter patient claims in the 2016 physician fee schedule. Quality improvement agencies will be the first to examine and then refer to the RACs for payment adjustment. Meanwhile, RACs would be instructed to concentrate merely on hospitals with unusually high rates of denied claims.