CareMedic Systems

RAC Management FAQs

Following are some frequently asked questions about the RAC program and AccelerateAR RAC Management. If you need more information about RAC Management, please call us at 800-508-8494, or email salesinfo@caremedic.com.

What is the purpose of the RAC program?
RAC is a CMS program created to identify and resolve Medicare overpayments and underpayments. Its mission statement is, “To reduce Medicare improper payments through the efficient detection and collection of overpayments, the identification of underpayments, and the implementation of actions that will prevent future improper payments.”

When will it start?

Section 203 of the Tax Relief and Health Care Act of 2006 directs the Secretary of HHS to make the RAC program permanent and nationwide by no later than January 1, 2010. The plan will roll out in phases, based on a structured expansion schedule. (See the CMS expansion schedule>>>)

How are our claims audited?
The four designated Recovery Audit Contractors will perform two types of review to identify Medicare overpayment and underpayment of claims—automated reviews and complex reviews. 

          Automated Review 
        RAC uses data mining techniques to 
        identify “claims that clearly contained errors,” 
        and makes overpayment and underpayment 
        determinations without evaluating the medical 
          record associated with a claim. Examples: 
        searching for claims for two or more identical 
        surgical procedures for the same beneficiary on 
        the same day at the same hospital (also known 
        as “Excessive Units Audit”); searching for 
        incorrect discharge status codes. 

          Complex Review 
        RAC makes overpayment and underpayment 
        determinations after evaluating the medical 
          record associated with a claim. Examples: 
        verifying that the diagnosis code listed on the 
        claim matches the diagnosis described in the 
        medical record; determining that the 
        beneficiary’s condition meets the Medicare 
        medical necessity criteria for the setting where 
        the service was rendered.

How does CareMedic help us analyze historical data?
CareMedic provides a data mining tool that allows providers to analyze historical data so they can identify exposure and measure risk in preparation for a RAC audit. CareMedic provides pre-selected report criteria based on known RAC targets.

How does CareMedic help us to prevent future take backs?
CareMedic provides edits through the MedicareRT application based on known RAC targets, such as specific DRGs, units, procedure code combinations, etc. Users can choose to turn on all, some or none of the RAC edits, which warn billers about potential audit targets and provide an opportunity for additional review or internal audit prior to submission.

Will CareMedic track the claims being stopped for RAC edits?
Yes. When the optional RAC Edits feature is turned on, edit volumes are tracked through both the edit reports and the MedicareRT dashboard.

How do we know what CMS has taken back?
RAC Management tracks and reports on the Medicare payment take backs that are reflected on your 835s.

How will the RAC Management help with RAC audits?
RAC Management stores the initial reason for the RAC audit, the RAC findings, final findings and results. It also stores the dates of RAC medical record request letters, auto take-backs, due dates and appeal dates, as well as payment history. RAC audit claims are tracked throughout the process until they have been either re-billed or closed.

How does the dashboard help me?
CareMedic’s performance management dashboard provides critical Key Performance Indicators (KPIs) in and executive overview format so you can efficiently monitor audit activity and results. The dashboard also provides: an alerting tool for critical deadlines; volume and dollar trending; drill down to slice data by facility, DRG, aging, appeal level, audit type, etc.

The dashboard reflects what Key Performance Indicators (KPIs)?

For RAC Management users, the MedicareRT dashboard presents the following information in chart or graph format with multiple drill-down options, as appropriate to the KPI:

RAC activity (#)
RAC activity ($)
Medical records in process (#)
Medical records in process ($)
Medical records not acknowledged (#)
Medical records not acknowledged ($)
Days from letter to medical records sent
In appeal (#)
In appeal ($)
Net payment result ($)
Percentage of appeals filed against take backs
Percentage of take backs overturned