Recovery audit program ready to roll

BALTIMORE - CMS is getting set to sic the dogs on home medical equipment providers.

The agency announced last month that it's ready to implement its recovery audit contractor (RAC) program nationwide. CMS has touted the RAC program as part of its multi-pronged attack on Medicare fraud and abuse, but industry stakeholders say it could unfairly penalize providers. That's because the RACs will be paid, in part, by how much money they recover, a system stakeholders liken to "bounty hunting."

"This program will have a devastating impact on homecare providers because we will be held responsible for what is in the medical record," stated Walt Gorski, AAHomecare's vice president of government affairs, who spoke at a Medicare RAC summit March 6. "AAHomecare believes there is a need for a new approach to stopping improper payments, focusing on better screening on the front end and denying entry into the Medicare program for entities that should not receive NPI numbers to begin with."

John Shirvinsky, executive director of the Pennsylvania Association of Medical Equipment Suppliers said that "the contractors are in this for one reason only: to make money."

"It's in their best interest to find fault," he said. "I think it's a very dangerous concept."

To combat fraud and abuse, CMS also plans to look at trends and patterns through new program integrity contractors, focusing on suppliers with higher than average billings; and work directly with beneficiaries to ensure that billed-for DME was received and medically necessary.

The agency awarded contracts to four RACs in October, but protests from two companies that did not win contracts put the program on hold. The protests were resolved Feb. 6.

The four RACS are: Diversified Collection Services in Livermore, Calif. (Jurisdiction A); CGI Technologies and Solutions in Fairfax, Va. (Jurisdiction B); Connolly Consulting Associates in Wilton, Conn. (Jurisdiction C); and HealthDataInsights in Las Vegas (Jurisdiction D).

As part of the protest settlement, the RACS will subcontract some of their work. PRG-Schultz will serve as a subcontractor to HDI, DCS and CGI in Regions A, B and D. Viant Payment Systems will serve as a subcontractor to Connolly Consulting in Region C. CMS said each subcontractor has negotiated different responsibilities in each region, including some claims review.

A three-year trial of the RAC program ended in March 2008. CMS gave the RACs $317 billion in paid claims data and the RACs found $1 billion in improper payments and repaid $37 million to providers.