Industry News

CMS Releases Proposed Rule on RACs for the Medicaid Program

Richard P. Kusserow | December 2010

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule outlining requirements and guidelines for the design and implementation of the state Medicaid Recovery Audit Contractor (RAC) programs.    Under Section 6411 of the Patient Protection and Affordable Care Act (PPACA), each state Medicaid program is required to develop a Medicaid RAC program. Similar to the Medicare RACs, the Medicaid RACs will review paid claims to identify improper payments and recoup overpayments from Medicaid providers.  The proposed rule includes a provision to extend the deadline for states to fully implement the Medicaid RAC programs.  The proposed rule also gives states some flexibility in how they design their Medicaid RAC programs, including how they determine the contingency fees.  Furthermore, the proposed rule requires states to develop an appeal process for Medicaid providers and states that the Medicaid RACs must coordinate their efforts with other contractors.  In the proposed rule, CMS warns states that the Medicaid RAC program will not replace any current Medicaid program integrity efforts.  Therefore, states are still required to maintain their current integrity and audit initiatives to ensure that Medicaid providers receive the proper payment.  CMS is accepting comments on the Proposed Rule until January 10, 2011. Department of Health and Human Services Centers for Medicare & Medicaid Services 42 CFR Part 455 Medicaid Program; Recovery Audit Contractors, 75 Fed. Reg. 217, 69037, 69045 (Nov. 10, 2010).

About the Author

Richard P. Kusserow established Strategic Management Services, LLC, after retiring from being the DHHS Inspector General, and has assisted over 3,000 health care organizations and entities in developing, implementing and assessing compliance programs.