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The RACs are "coming to town"

Posted by: Robert Markette
December 21, 2006

Last week I commented on the recovery audit contractor (RAC) experiment that CMS was performing in Florida, New York, and California.  The post was spurred by an article I saw in a recent Home health line…  Well, in this weeks, Home health line, the news regarding RACs is not good.  In its final session this fall, Congress passed legislation that not only made the RAC process national, it applied the process to home health agencies.

Under this legislation, there must be recovery audit contractor audits in every state by January 1, 2010.  In other words, you will soon see auditors coming to your agency who are paid on the basis of what they recover for Medicare.  Many home health agencies feel that the survey process is premised on surveyors being trained to “look for problems.”  Well, the RAC process promises to be even worse, because the auditors are not just encouraged to look for overpayments, they are paid a percentage of any identified overpayment.

If the experience of providers in Florida, New York and California proves to be the norm, you will see more overpayment findings.  This will likely lead to more appeals on behalf of agencies.  You should be aware of how the appeals process works, because if you get a letter finding an overpayment based upon the efforts of an RAC, you will need to make some quick decisions.

In any administrative process, there are specific deadlines.  Any request for a reconsideration/appeal must be filed within those deadlines, or the right to appeal is lost, forever.  Adding to the problem is that the process for challenging overpayment determinations/recoupments is rather convoluted.  There are a number of layers to the appeals process and you may have to deal with everything from a simple reconsideration up to hearing before an ALJ or even the need to file in federal court.

For these reasons, it is worthwhile to retain counsel to assist you.  You will need to a lot of the work to swiftly identify records and documents that support your position regarding the alleged overpayment, but the process of filing the reconsideration request and moving the appeal through the various levels of the administrative process is something you should undertake yourself with a great deal of hesitation.  As I said before, procedural mistakes are often fatal in administrative matters.

In addition, because later levels of appeal are only reviews, failing to include counsel at the beginning of the appeal process may limit your options later.  If you retain counsel only as you are preparing to proceed to an ALJ, your attorney may identify additional issue or evidence that could have been helpful in the appeal.  Unfortunately, but not raising these issues at the beginning, you most likely have waived them.  Generally in the appeals process, at later stages you are prohibited from introducing new evidence and you are often prohibited form interjecting new issues later.  (Because the later levels are not performing new hearings they are simply reviewing what the previous level did, they will not accept new evidence.)

These are things to keep in mind as we enter the brave new world of RACs.  If you think an auditor is wrong, you should consider your options carefully and quickly.

        

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