Medicaid RAC programs heat up

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Friday, July 20, 2012

YARMOUTH, Maine – More and more state Medicaid programs across the country are getting Recovery Audit Contractor (RAC) programs up and running.

In Texas, for example, the state Medicaid program in June issued a request for proposals for a RAC to conduct audits. The contractor’s expected start date: Sept. 1.

"We've already got cash flow concerns because of Medicare's audits," said Liz Moran, executive director of the Medical Equipment Suppliers Association (MESA), which represents providers in Texas. "If Medicaid starts to do the same thing, what will that do to cash flow?"

The Affordable Care Act, which was passed by Congress in 2010 and upheld by the U.S. Supreme Court in June, contains a provision that expands the current Medicare RAC program to Medicaid.

In Pennsylvania, the state Medicaid program is in the final stages of awarding a RAC contract. Like the Medicare RAC program, John Shirvinsky, executive director of the Pennsylvania Association of Medical Suppliers (PAMS) is critical of the Medicaid RAC program because it has created a “bounty hunter” mentality that leads to abuse by contractors.

"The concern doesn't go away when you take a bad concept and apply it to another program," he said. 

In states where Medicaid RAC programs are already up and running, there seems to be a sense of resignation.

"Everyone already gets audited so often," said Rose Schafhauser, executive director of the Midwest Association for Medical Equipment Services (MAMES). "So far, these have been no big deal."