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Recovery Audit Contractor (RAC) Program

Background

Section 6411(a) of the Affordable Care Act amended section 1902(a) (42) of the Social Security Act to require that States and territories establish Medicaid RAC programs.  States that have not received an exemption from the Centers for Medicare and Medicaid Services (CMS) are required by statute to contract with one or more RACs to identify overpayments and underpayments and to recover overpayments from Medicaid providers.

The RAC program was implemented by the Mississippi Division of Medicaid (DOM) to conduct post-pay audits of claims in order to correct improper payments. Improper payments are classified as overpayments and underpayments. The RAC Program was implemented to protect the Medicaid Trust Fund from fraud, abuse, and waste.

Federal regulations issued by CMS regarding the RAC program are located at 42 CFR Part 455, Subpart F.  Certain key provisions are noted below.

  • The RAC must not review claims that are older than three (3) years from the date of the claim, unless it receives approval from the State Medicaid Agency.
  • The State Medicaid Agency must coordinate the recovery efforts of RACs with other auditing entities.
  • The RAC must refer suspected cases of fraud and/or abuse to the State Medicaid Agency in a timely manner, as defined by the State.
  • The State is required to set limits on medical record requests.
  • Medicaid RACs must notify providers of overpayment findings within sixty (60) calendar days of the preliminary findings letter.
  • Medicaid RACs must employ at least one full time medical director.

Recovery Audit Contractor

The Division of Medicaid has contracted with HealthMind, LLC (formerly known as DataMetrix) to administer the RAC program effective April 1, 2017.  HealthMind, LLC will conduct audits of paid claims data to identify improper payments (overpayments and underpayments). HealthMind has experienced staff performing reviews, including: physicians, certified coders, statisticians and credentialed clinical reviewers.  Providers whose claims are chosen for a RAC-initiated audit, will be notified in writing and given instructions as to the appropriate processes to follow. HealthMind, LLC will work closely with DOM, Office of Program Integrity staff to develop all procedures and coordinate all audits to ensure there is no duplication of efforts.

Current Audit Concepts – May 1, 2018

Add On Codes
Purpose of Audit: To validate claims coded and billed by providers and paid by DOM are not being overpaid for add-on codes when the required primary procedure either was not reported or was not paid.

New Patient Visits
Purpose of Audit: To validate claims coded and billed by providers and paid by DOM are correct for new patient visits; to identify incorrect payments associated with the same provider or provider group with the same specialty and subspecialty billing more than one new patient Evaluation and Management code within a 3 year time period.

3-Day Rule
Purpose of Audit: To validate that the claims coded and billed by the providers and paid by DOM are correct under the “3-day payment window.” Under the payment window policy, a hospital (or an entity that is wholly owned or wholly operated by the hospital) must include on the claim for a beneficiary’s inpatient stay, the diagnoses, procedures, and charges for all outpatient diagnostic services and admission-related outpatient non-diagnostic services that are furnished to the beneficiary during the 3-day payment window.

RAC Probe Reviews

RAC probes are mini-reviews conducted to identify high-risk areas that merit a full-scale audit. Upon completion of the probe reviews, the RAC submits the issue(s) to the DOM for review and approval before audit work begins. There are no current probe reviews.

Recovery Audit Contractor Compliance

DOM utilizes office staff, contracted audit entities or combination of both to conduct auditing and monitoring reviews of Medicaid providers. The RAC is contracted by the DOM as an audit entity. Providers should follow the guidelines in reference to audits as stated in the Administrative Code when receiving correspondence from the RAC. Providers receive Medical Record Request letters from the RAC which initiates the beginning of an audit.

Providers who do not comply with this request are subject to technical denials. Technical denials occur after medical records have been requested and providers do not comply by sending in the requested documentation. The Administrative Code Title 23, Part 304, Rule 1.1 Audit/Monitoring Review Overview states, if a provider fails to participate or comply with the Division of Medicaid’s audit process or unduly delays the audit process, the Division of Medicaid considers the provider’s actions or lack thereof, as abandonment of the audit. If the DOM suspects a provider of fraud, abusive practice, audit abandonment, or present a risk of imminent danger to clients, the DOM may take one or more of the actions listed below:

  1. Immediately issue a final report
  2. Terminate the provider’s agreement with Medicaid
  3. Issue a subpoena for the provider’s records
  4. Refer the provider to the appropriate prosecuting authority

Recovery Audit Contractor Resources

RAC Contacts

HealthMind
Provider Communications Department
Phone: 1-866-880-0608
Fax: 1-888-904-8842
Email: MSDOMRecoveryAudit@healthmindllc.com
Mail:
HealthMind
Attn: MSDOM Recovery Audit
32 West 200 South #503
Salt Lake City, UT 84101

Providers can continue to submit any questions/concerns in regards to the RAC program to the Division of Medicaid, Office of Program Integrity by emailing staff within the Office of Program Integrity at MSRAC@medicaid.ms.gov.