HEalthcare Accounting News-CMS Releases Medicaid RACs Final Rule

The Centers for Medicare and Medicaid Services (CMS) released its Medicaid RACs final rule on September 15, 2011 after delaying its previous expected implementation on April 1st. The Medicaid RAC program’s purpose is to fight Medicaid fraud and abuse, sharing many initiatives that the Medicare RAC program implements. According to Health and Human Services, the new initiative will save taxpayers an estimated $2.1 billion over the next five years, of which $900 million will be returned to the states

This final rule will implement section 6411 of the Patient Protection and Affordable Care Act and provides guidance to individual states related to federal/state funding of state start-up, operation, and maintenance costs of Medicaid RACs, and the payment methodology for state payments to Medicaid RACs. The rule informs states that an adequate appeals process is in place for providers to dispute adverse determinations made by the Medicaid RACs and directing states to coordinate with contractors and entities auditing Medicaid providers and with state and federal law enforcement agencies.

CMS provides two options to help states better restructure payments:

• Option One: If state A paid RAC A its fee when the RAC identified an overpayment, and provider A appeals and prevailed at any stage, RAC A would be required to return any portion of the contingency fee that corresponded to the amount of an overpayment that was overturned at any level of appeal.
  
  
• Option Two: If State B determined it would pay RAC B its contingency fee at the point at which the recovery amount is fully adjudicated, that is, at the conclusion of any and all appeals to available to provider B, then state B would pay RAC B a contingency fee based on the amount recovered.

The regulations outlined are effective January 1, 2012. If you need assistance or have any questions, please email or call 1 (888) 875-9770.

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