In a sign that can be viewed as the first step toward Medicaid Recovery Audit Contractors (RAC) implementation, on September 10 the Centers for Medicare and Medicaid Services (CMS) released an information collection form and supporting documents for contractors for Medicaid plans.  The documents within draft form CMS-10343 will be used by state Medicaid plans to attest that they have contracted with a contingency fee auditor.  The forms list several criteria for the RAC expansion, including provisions related to payment of the Medicaid RACs, appeal of adverse Medicaid RAC determinations, and coordination of Medicaid RAC activity with other reviewers and entities (e.g., the Medicaid integrity program).

Under section 1902(a)(42)(B)(i) of the Social Security Act, States are required to establish programs to contract with one or more Medicaid RACs for the purpose of identifying underpayments and recouping overpayments under the State plan and any waiver of the State plan with respect to all services for which payment is made to any entity under such plan or waiver.  Further, the statute requires States to establish programs to contract with Medicaid RACs in a manner consistent with State law, and generally in the same manner as the Secretary contracts with Medicare RACs.

State programs contracted with Medicaid RACs are not required to be fully operational until after December 31, 2010.  States may submit to CMS a State Plan Amendment (SPA) attesting that they will establish a Medicaid RAC program.  States have broad discretion regarding the Medicaid RAC program design and the number of entities with which they elect to contract.  Providers are being advised to begin to prepare for Medicaid RACs by first educating themselves on state Medicaid rules and beginning to conduct audits on high-volume Medicaid procedures to determine if bills meet criteria.  In the Medicare RAC demonstration project, coding and medically unnecessary services or settings were the cause of the majority of overpayments.

The Association’s Payment Committee will be reviewing the draft form and supporting documents to determine how best to prepare our members for the way the Medicaid RAC for Minnesota will identify over/underpayments.

Patti Cullen, CAE
952.851.2487
pcullen@careproviders.org

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