Under a new rule released by the Centers for Medicare and Medicaid Services, states must fully implement their Medicaid Recovery Audit Contractor (RAC) programs by Jan. 1, 2012. The rule, issued on September 14, also offers guidance to states on how to set up appropriate appeals processes for providers to dispute adverse determinations, and other technical aspects of the RAC program.
The Medicaid RAC program was created under the Affordable Care Act and is modeled after the existing Medicare RAC program. It is intended to reduce waste within Medicaid by helping CMS identify overpayments (as well as underpayments) and to recover improper payments. States must contract with one or more RACs, with all payments to the RACs coming from funds recovered through the program. The program is anticipated to produce $2.1 billion in savings over the next five years. The final rule is available here until Sept. 16; at that time it will be posted in the Federal Register.