CMS pauses new RAC audits

Friday, February 21, 2014

WASHINGTON – Industry stakeholders caution HME providers against putting too much stock in CMS’s announcement last week that it will not initiate new audits as it transitions to new recovery audit contractors (RACs).

“Essentially, this is common that a contractor slows down their new workload so they can finish it out before their contract ends,” said Wayne van Halem, president of The van Halem Group. “So, unfortunately for the DMEPOS industry, I believe it’s just the calm before the next storm.”

Here’s how CMS plans to wind down operations for the current RACs: Feb. 21 was the last day the RACs could send a post-payment additional documentation request (ADR); Feb. 28 is the last day the Medicare administrative contractors (MACs) can send prepayment ADRs for RACs to review; and June 1 is the last day RACs can send improper payment files to the MACs for adjustment.

While it could be several months before the new RACs are in place and new audits are initiated again, claims submitted during that time period will be fair game, stakeholders point out.

“Unfortunately, once the new RAC contracts are signed, the new audit contractors will have the ability to go back and review claims submitted throughout the hiatus,” said Ryan Ball, director of state policy for VGM & Associates.

For HME, CMS’s transition to new RACs in 2014 means a national contractor dedicated to just HME and home health. That’s the next storm van Halem refers to.

“I think we will see the volume increase once the workload is transitioned,” he said.