Recovery Audit Contractors (RACs)

News & Analysis as of

Washington Healthcare Update

This Week: Congress tries to put together a tax extender package, which may provide an opportunity for some Affordable Care Act changes... HHS releases final rule on bundled payment for Joint Replacement Comprehensive Care...more

CMS Gives Providers Some Leverage in RAC Record Collection Requirements: Five Things to Know about ADRs

The Centers for Medicare & Medicaid Services (“CMS”) announced that it has reduced the maximum percentage of records that providers must submit to Recovery Audit Contractors (“RAC”) through the payment auditing process...more

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

CMS Posts Recovery Audit Contractor Program Update, Including Reduced Documentation Request Limits – On November 6, 2015, CMS posted updates regarding the Recovery Audit Contractor (RAC) program, including a new additional...more

AGG Helps Hospice Weather the Perfect Storm of Aggressive Medicare Payment Denials and Administrative Appeal Backlog

Medicare’s implementation of post-payment review through private contractors who are overly aggressive in denying payments, combined with a severe backlog of cases in queue for hearing before an Administrative Law Judge...more

CMS Finalizes Significant Changes to the Two Midnight Rule in the 2016 OPPS Final Rule

On October 30, 2015, the Centers for Medicare & Medicaid Services (CMS) released the Calendar Year 2016 Outpatient Prospective Payment System Final Rule (2016 OPPS Final Rule). In the 2016 OPPS Final Rule, CMS finalizes...more

Annual RAC Report Shows Significant Drop in Recoveries by CMS in 2014

On October 15, 2015, CMS released its annual recovery auditing report to Congress. CMS’s Recovery Auditor (RAC) program identifies and corrects improper payments through a combination of prepayment and post-payment reviews,...more

RACs recover $2.39 billion in overpayments in FY 2014

Last week, CMS released its report to Congress regarding the results of the FY 2014 Medicare Recovery Audit Program (the “Report”). Of note, the Report notes that RACs identified and corrected more than 1 million claims for...more

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

Quality Improvement Organization Releases Guidance on Short-Stay Reviews – As previously reported, in July 2015, CMS announced that Quality Improvement Organizations (QIOs) would begin conducting reviews of certain inpatient ...more

Medicare FFS RACs Identified Almost $2.4 Billion in Overpayments in FY 2014

According to CMS, the Medicare Fee-For-Service (FFS) Recovery Auditor Program identified and corrected $2.57 billion in improper Medicare payments in FY 2014. The lion’s share of this amount — $2.39 billion — represented...more

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

House Ways & Means Health Subcommittee Hosts Hearing on Hospital Payment Issues

On July 22, 2015, the U.S. House Ways & Means Health Subcommittee heard testimony from Mark Miller, Ph.D., executive director of Medicare Payment Advisory Commission (MedPAC). Dr. Miller’s testimony highlighted recent trends...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 Report to Congress on Medicare and the Health Care Delivery System

The Medicare Payment Advisory Commission (MedPAC) has released its June 2015 Report to the Congress on Medicare and the Health Care Delivery System. The report includes a series of recommendations on Medicare hospital...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 Committee Passes Bill Addressing Medicare Appeals Inefficiencies

On June 3, 2015, the Senate Finance Committee passed an original bill that aims to streamline and improve the Medicare Audit and Appeals Process. The Medicare appeals process has recently faced scrutiny from industry leaders...more

MACRA: three compliance implications for Medicare providers

Much has been written about the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and its repeal of the Sustainable Growth Rate formula for physician compensation and the potential gainsharing safe harbor. But the...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

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