Recovery Audit Contractor

News & Analysis as of

New Restrictions: CMS Limits Scope of Review on Redeterminations and Reconsiderations for Certain Audit Appeals

On August 13, 2015, the Centers for Medicare & Medicaid Services (CMS) issued instructions to Medicare Administrative Contractors (MACs) and Qualified Independent Contractors (QICs) regarding the scope of review for...more

HHS Releases Long-Awaited 340B Proposed Guidance

In August 27, 2015, the U.S. Department of Health and Human Services (HHS) released the long-awaited and much-anticipated proposed 340B Drug Pricing Program (340B Program) Omnibus Guidance (Proposed Guidance). The Proposed...more

CMS Updates Inpatient Hospital “Two Midnight” Review Education/Enforcement Strategy

CMS recently provided an update on its education and enforcement strategies related to its “Two Midnight” policy, which addresses when surgical procedures, diagnostic tests and other treatments are generally considered...more

Also In The News - Health Headlines - August 2015 #4

President Obama Signs Outpatient Status Notification Bill On August 6, 2015, President Obama signed the Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act. This legislation requires hospitals...more

Another Delay for the Two-Midnight Rule

The Centers for Medicare and Medicaid Services (CMS) announced, on August 12, 2015, that it has extended the enforcement delay of the controversial two-midnight rule governing short hospital stays until the end of the year....more

Cinderella May Not Turn Into a Pumpkin After All: The Proposed Relaxation of the Two-Midnight Rule

On July 8, 2015, the Centers for Medicare and Medicaid Services (“CMS”) released a Proposed Rule regarding the 2016 Hospital Outpatient Prospective Payment System (“OPPS”). The Proposed Rule, in addition to proposing updates...more

CMS Releases CY 2016 Proposed Rule on OPPS and ASC Payment Systems, Including Changes to the Two Midnight Rule

On July 1, 2015, CMS released a Proposed Rule that would revise the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgery Center (ASC) Payment System payment rates for calendar year (CY) 2016, and would...more

CMS Proposal Broadens Medicare Inpatient Reimbursement Eligibility Under the “2-Midnight Rule"

On July 1, 2015, the Centers for Medicare & Medicaid Services (CMS) released proposed updates to the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System for Calendar Year...more

MedPAC Releases June 2015 Report to the Congress

The Medicare Payment Advisory Commission (MedPAC) released its “Report to the Congress: Medicare and the Health Care Delivery System” on June 15, 2015. As previously reported, the report makes recommendations for policy...more

Senate Aging Committee Hearing on Hospital Observation Stay Policies

On May 20, 2015, the Senate Special Committee on Aging held a hearing entitled “Challenging the Status Quo: Solutions to the Hospital Observation Stay Crisis.” Chairman Susan Collins (R-ME) and Ranking Member Claire...more

RAC Reform Legislation Reintroduced in House

On April 30, 2015, Representatives Sam Graves (R-MO) and Adam Schiff (D-CA) reintroduced H.R. 2156, the Medicare Audit Improvement Act of 2015. H.R. 2156 contains a number of significant new provisions from legislation of...more

MACRA Brings Modifications to the Recovery Audit Program

This is the second K&L Gates Health Care Client Alert discussing the “Medicare Access and CHIP Reauthorization Act of 2015” (MACRA), signed into law by President Barack Obama on April 16, 2015. This alert focuses on...more

Federal Appeals Court Finds that New RAC Contracts Violate Federal Regulations

On March 10, 2015, the U.S. Court of Appeals for the Federal Circuit found that the Federal Acquisition Regulation (FAR) applies to CMS’s revised payment terms for new Recovery Audit Contractor (RAC) contract solicitations,...more

Medicare RAC Program Improvements Delayed Until 2016 - Shorts on Long Term Care February 2015

The Centers for Medicare and Medicaid Services (CMS) had planned to award new contracts to companies that act as Medicare’s recovery audit contractors (now referred to as recovery auditors) (RAs) for operation of the Medicare...more

CMS Announces DMEPOS/Home Health/Hospice RAC, Improvements to RAC Process

CMS has announced that it has awarded the Region 5 Recovery Audit contract to Connolly, LLC (although the General Accounting Office subsequently reported that a bid protest has been filed regarding this award). The purpose of...more

D.C. Circuit Declines Hospitals’ Plea for Relief from CMS Catch-22

Here’s how the catch works. A hospital admits and treats a Medicare patient who needs care. The hospital bills Medicare and gets paid. Later—usually much later—a RAC auditor rules that the patient needed only outpatient care...more

Health Headlines: Also in the News - September 2014

GAO Finds CMS Should Fully Develop Plans for Medicare Advantage Encounter Data and Assess Data Quality Before Use – In a report released on September 2, 2014, GAO evaluated CMS’s plans for using Medicare Advantage (MA)...more

Federal Court Rejects Challenge to new CMS Recovery Auditor Contracts

On August 22, 2014, the U.S. Court of Federal Claims denied a challenge by incumbent Recovery Audit Contractor (RAC) CGI Federal, Inc. (CGI) to CMS’s plan to award new RAC contracts. Among other things, the Court found that...more

RAC Program to Resume Limited Reviews

On August 4, 2014, the Centers for Medicare and Medicaid Services (CMS) announced that it would allow the Recovery Audit Contractor Program (RAC) to resume a limited number of reviews in August. The program has been dormant...more

GAO Issues Report on Post-Payment Claims Reviews by CMS Contractors

The U.S. Government Accountability Office (GAO) recently issued a report entitled “Medicare Program Integrity: Increased Oversight and Guidance Could Improve Effectiveness and Efficiency of Post-Payment Claims Reviews,” which...more

AHA Renews Complaints about OIG Hospital Compliance Reviews

The American Hospital Association (AHA) has renewed its complaints about OIG “hospital compliance reviews.” Last Thursday AHA Executive Vice President Rick Pollack sent a letter to Health & Human Services Secretary Burwell...more

Efforts to Stop Health Insurance Fraud Through Use of Contractors Under Fire

In recent reports, from June 25, 2014 and August 13, 2014, the Government Accountability Office (GAO) highlights the mixed results achieved by the federal government's increased efforts to crack down on health insurance fraud...more

Who Audits the Auditors?

Since the advent of Medicare in 1965, hospitals have bemoaned the cost and burden of Medicare audits. The complaints increased when CMS hired private contractors for the audits. They became deafening in 2009 with the advent...more

Brace Yourself: The RACs Are Back

Under the controversial program private contractors audit hospitals and other Medicare providers for fraudulent and erroneous Medicare billing. Why is it controversial? Because the auditors are paid a percentage of...more

RAC Program Update: CMS Appoints Provider Relations Coordinator

On June 2, 2014, CMS posted a brief update on its Recovery Audit Contractor (RAC) program website announcing the creation of a “Provider Relations Coordinator” position within CMS. The announcement states that the role of...more

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