CMS has announced that it is “pausing” Recovery Audit Contractor (RAC) audits in preparation for the procurement of new RAC contracts and to “allow CMS to continue to refine and improve the Medicare Recovery Audit Program.” The following is the timeline for winding down current RAC activities:

  • February 21 is the last day a RAC may send a postpayment Additional Documentation Request (ADR);
  • February 28 is the last day a Medicare Administrative Contractor (MAC) may send prepayment ADRs for the Recovery Auditor Prepayment Review Demonstration; and
  • June 1 is the last day a RAC may send improper payment files to the MACs for adjustment.

CMS also announced a number of changes to the RAC program, made in response to industry feedback, that are intended to “result in a more effective and efficient program, including improved accuracy, less provider burden, and more program transparency.” Specifically, the following changes will be effective with the next RAC program contract awards.

  • RACs must wait 30 days to allow for a discussion before sending the claim to the MAC for adjustment (providers will not have to choose between initiating a discussion and an appeal);
  • RACs must confirm receipt of a discussion request within three days;
  • RACs must wait until the second level of appeal is exhausted before they receive their contingency fee;
  • CMS is establishing revised ADR limits that will be diversified across different claim types (e.g., inpatient, outpatient); and
  • RACs will be required to adjust the ADR limits in accordance with a provider’s denial rate (providers with low denial rates will have lower ADR limits while provider with high denial rates will have higher ADR limits).