Industry News

CMS Announces Pause in RAC Operations

Jennifer Kirchner | March 2014

The Centers for Medicare & Medicaid Services (CMS) announced that it will pause Medicare Recovery Audit Contractor (RAC) operations to “refine and improve” the RAC Program until the next round of contracts is approved, which are currently in the procurement process.  CMS notes the following important dates for providers:

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

CMS also announced five improvements to the RAC Program, to be implemented once new contracts are awarded:

  1. Providers will no longer have to choose between initiating a discussion and an appeal.  RACs will be required to wait 30 days to allow for a discussion before sending the claim to the MAC for adjustment.
  2. RACs must confirm receipt of a discussion request within 3 days.
  3. RACs will not receive their contingency fee until the second level of appeal is exhausted.
  4. ADR limits will be diversified across different claim types (e.g., inpatient, outpatient).
  5. 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.

Updates to the RAC Program are available at:

A list of the improvements to be made to the RAC Program is available at:

About the Author

Jennifer Kirchner is a licensed attorney in Illinois and Wisconsin. Ms. Kirchner has expertise in assessing provider compliance with the Anti-Kickback Statute, Stark Law, the False Claims Act, HIPAA Privacy and Security Rules and clinical research laws and regulations.