CMS sets timeline for new RAC

Contract modifications for existing RACs allow agency to get buy-in on changes
Friday, November 20, 2015

WASHINGTON – It looks like CMS will name a new national RAC for HME by late summer of 2016.

In a string of updates this month, CMS released requests for proposals for the next round of RACs and asked the existing RACs to sign contract modifications that allow them to continue auditing activities, including sending out additional documentation requests or ADRs, through July 31, 2016.

“My guess is, if they have extended the contracts to that time period, that’s their intended timeline for having someone announced,” said Wayne van Halem, president of the van Halem Group.

CMS named Connolly as the first ever national RAC for HME, home health and hospice in December of 2014. But due to controversies surrounding certain planned changes to the RAC contracts, the agency has had to put all contracts back out to bid.

Asking the existing RACs to sign contract modifications allows CMS to incorporate changes, like requiring contractors to wait until after a discussion period to initiate overpayment proceedings, into the contracts now.

“CMS is telling the RACs, we have requests for bids out, your contracts don’t go on indefinitely, you have to commit to this extension,” said Andrea Stark, a reimbursement consultant with MiraVista. “That’s where they’re going to get the buy-in to comply with the enhancements not in the original contract.”

CMS outlined steps if the existing RACs don’t sign the contract modifications but that’s unlikely to happen. 

“They want to keep the money going,” Stark said.

The change that caused much of the controversy to begin with, however, is not included in the contract modifications. CMS would also like to prevent the RACs from collecting contingency fees until the second level of appeals is exhausted, but it currently lists that change as “TBD.”

“I’m surprised it’s still on the docket at all,” Stark said.

Neither van Halem nor Stark expects much of a ramp up in activity by the RACs until the new contracts are awarded. But that doesn’t mean providers can drop their guards, they say.

“The claims they’re submitting now will be the claims that the new RAC will be looking at,” van Halem said. “When it’s quiet isn’t the time to be complacent.”