The Medicare Recovery Audit Contractor Program: A Survival Guide for Healthcare Providers

Medicare fraud is big business, but while only a few profit from intentional malfeasance, the Centers for Medicare & Medicaid Services is now taking a closer look at everyone. The Medicare Recovery Audit Contractor Program, already infamously known as the RAC, swings into full operation in 2010 and every healthcare provider that receives payment under any of the Medicare fee-for-service payment systems will be subject to RAC scrutiny. And scrutinize, they will… .

Instead of developing another bureaucracy, the government has turned the job of auditing over to outside firms whose payment will be based exclusively on finder fees for recouping improper payments. There will be little tolerance for poor record keeping or gray areas of coding.

Written by medical billing guru and Lean accounting expert, Duane Abbey, The Medicare Recovery Audit Contractor Program: A Survival Guide for Healthcare Providers explains all that is required to prepare and successfully defend against inappropriate RAC audit recoveries. Using the same succinct style that always makes his writing so accessible, Abbey illustrates his lessons with simple case studies placed in the context of a fictitious community whose population is served by a hospital, clinics, a nursing facility, and other providers all seeking to maintain compliance and profitability.

In discussing RAC guidelines, this resource —


Shows how to identify overpayment areas and associated compliance issues
Details a systematic problem-solving process relative to RAC processes
Addresses resource requirements including new personnel, such as RAC specialists
Includes planning models for developing compliance departments
Provides an extensive glossary to make sense of medical billing’s alphabet soup of acronyms


While the book works well as a stand-alone reference for those seeking advice on RAC audits, readers will also discover that this volume extends the lesson of Abbey’s classic Compliance for Coding, Billing & Reimbursement, Second Edition , making this book a natural companion for those wanting to fully explore the role of compliance and Lean accounting in medical billing.

Acronym ListingChapter 1 IntroductionSynopsisConventions Used throughout the BookChapter 2 Purpose, Structure, and Intent of the RAC Audit ProgramIntroductionRAC Demonstration ProjectSelection and Utilization of RACsCMS and the RAC OperationsPayment of the RACsSummary and ConclusionChapter 3 RAC, OIG, and Medicare AuditsIntroductionGeneral Categories of AuditsMedicare AuditsOIG and DOJ AuditsMedicare CERT ProgramOIG Guidance: Federal RegisterRAC AuditsWhat Happened to the Underpayments?CMS’s Approach for the RACsSummary and ConclusionChapter 4 Brief Review of Healthcare Payment and Payment SystemsIntroductionClaims Adjudication RequirementsCovered Individual/Covered ServicesProper Orders with Appropriate Diagnostic JustificationQualified Facility or PractitionerAppropriate DocumentationMedicare Billing PrivilegesCorrect Claim, Filed TimelyMedicare Payment SystemsMedicare Fee SchedulesMedicare Prospective Payment SystemsMedicare Payment System InterfacesSummary and ConclusionChapter 5 RAC Audit IssuesIntroductionUnderlying Compliance AreasMedical NecessityPayment System InterfacesInadequate GuidanceConfusing GuidanceSample Problem Areas by Provider TypeHospitalsCritical Access HospitalsPhysicians and ClinicsOther Healthcare ProvidersSummary and Future IssuesChapter 6 RAC ProcessesIntroductionProblem Identification, Data Mining, and Probe AuditsAutomated ReviewsComplex ReviewsExtrapolationRAT-STATS ExampleStratified SamplingUsing Extrapolation in ReverseSummary and ConclusionChapter 7 Understanding the RAC Appeals ProcessIntroductionAppeals ProcessRAC DiscussionRequest for RedeterminationReconsiderationAdministrative Law JudgeMedicare Appeals CouncilFederal District CourtPursuing the Appeals ProcessDeveloping Organizational ResourcesCase DevelopmentHierarchy of Medicare GuidanceClarifying GuidanceAmbiguous GuidanceIncorrect GuidanceRequesting Guidance and the Federal RegisterCoding/Billing versus Adjudication/PaymentDirectives Inherent in the Payment SystemInterpretation of GuidanceOther IssuesMMA 2003 Protection ProvisionsAddressing Extrapolation CasesSummary and ConclusionChapter 8 Meeting the RAC Audit ChallengeIntroductionReviewing and Assessing Current CBR Compliance ProgramAdapting Your CBR Compliance ProgramBudgeting and Financial ImpactsInternal RAC Program TrainingSummary and Conclusion