- CMS has finalized new contracts for its controversial Medicare Fee-for-Service Recovery Audit Contractors (RACs) program, which pays contractors to research and identify Medicare overpayments to hospitals and healthcare practices.
- The awardees are Performant Recovery, Cotiviti, and HMS Federal Solutions.
- Along with the new contracts come updates to how RACs are paid, audit timelines, and the review process.
Former contractor CGI Group will not be back, Modern Healthcare reported. The company had previously filed suit over the payment process being toughened up to ensure each audit gets through the second level of a five-level appeals process before the contractor is awarded payment for that audit.
The RAC program has had its share of criticism over arguments that it burdens providers, creates problematic backlogs of appeals, and previously incentivized contractors to submit audits whether accurate or not--an issue addressed with the requirement that audits must pass significantly into the appeals process to show their validity. That requirement may in turn reduce excess numbers of appeals that have previously driven much of the appeals backlog.
On the flipside, it's clear how that payment update was unpleasant news for RACs given that they previously received payment for reported overpayments within 45 days. Now, waiting until the second level of the appeals process is reached can delay payment for more than a year.
Yet even with its issues, the program has reportedly recouped the federal government $8 billion in overpayments since it was implemented in 2009, and the previous contracts were extended several times.