On September 16, 2011, the Centers for Medicare and Medicaid Services (CMS) published the final rule for Medicaid recovery audit contractors (RACs) in the Federal Register at 76 Federal Register 57808. This final rule implements section 6411 of the Patient Protection and Affordable Care Act (ACA), and provides guidance to states related to federal/state funding of state start-up, operation and maintenance costs of Medicaid RACs and the payment methodology for state payments to Medicaid RACs. States will be required to implement their RAC programs by January 1, 2012.

The American Health Care Association (AHCA) submitted extensive comments on the CMS Medicaid RAC proposed rule. CMS was responsive to many but not all of their concerns. In the final rule, CMS retained some of its proposed rules, but added a plethora of rules in response to commenter submissions. CMS states that after consideration of the comments reviewed and further analysis of specific issues, the agency is adopting the provisions of the proposed rule as final with several revisions. The provisions of the final rule that differ from the proposed rule are as follows:

• States may exclude Medicaid managed care claims from review by Medicaid RACs (§ 455.506(a) (1)).
• States must coordinate the recovery audit efforts of their Medicaid RACs with other auditing entities (§ 455.506(c)).
• States must make referrals of suspected fraud and/or abuse to the MFCU or other appropriate law enforcement agency (§ 455.506(d)).
• States must set limits on the number and frequency of medical records to be reviewed by the Medicaid RACs subject to requests for exceptions made by the RACs (§ 455.506(e)).
• Each RAC must hire a minimum of 1.0 FTE contractor medical director who is a doctor of medicine or doctor of osteopathy in good standing with the relevant state licensing authorities and has relevant work and educational experience.
• A state may seek to be excepted, in accordance with § 455.516, from requiring its RAC to hire a minimum of 1.0 FTE contractor medical director by submitting to CMS a written request for CMS review and approval (§ 455.508(b)).
• RACs must hire certified coders unless the state determines that certified coders are not required for the effective review of Medicaid claims (§ 455.508(c)).
• RACs must work with the state to develop an education and outreach program (including notification of audit policies and protocols) (§ 455.508(d)).
• RACs must provide minimum customer service measures including:
• Providing a toll-free customer service telephone number in all correspondence sent to providers,
• Staffing the toll-free number during normal business hours from 8:00 a.m. to 4:30 p.m. in the applicable time zone (§ 455.508(e)(1));
• Compiling and maintaining provider approved addresses and points of contact (§ 455.508(e)(2));
• Mandatory acceptance of provider submissions of electronic medical records on CD/DVD or via facsimile at the providers’ request (§ 455.508(e)(3));
• Notifying providers of overpayment findings within 60 calendar days (§ 455.508(e)(4)).
• RACs must not review claims that are older than 3 years from the date of the claim, unless it receives approval from the state (§ 455.508(f)).
• RACs should not audit claims that have already been audited or that are currently being audited by another entity (§ 455.508(g)).
• If a provider appeals a Medicaid RAC overpayment determination and the determination is reversed, at any level, then the Medicaid RAC must return its contingency within a reasonable timeframe as prescribed by the state (§ 455.510(b)(3)).
• States must adequately incentivize the detection of underpayments (§ 455.510(c)(2)).
• States must notify providers of underpayments that are identified by the Medicaid RACs (§ 455.510(c)(3)).
• States must provide appeal rights under state law or administrative procedures to Medicaid providers that seek review of an adverse Medicaid RAC determination (§ 455.512).

Now that the final rule has been published, the Association will find out how the program will be implemented in Minnesota. Please contact us if you receive any contacts from Medicaid RACs so we can begin to document activities in Minnesota.

Patti Cullen, CAE
952.851.2487
pcullen@careproviders.org

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