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How often have you or an HHA that you know, undergone a CMS Audit? These days it’s becoming more popular for the government to audit HHAs on the grounds of overpayment, no or insufficient documentation, incorrect coding, fraudulent activities, or any one of ten other things. In 2013 alone, CMS has recouped over $3.1 billion mainly due to insufficient documentation. The RAC audit is one of the many audit types, which was developed during the Bush Administration to protect the Medicare Trust Fund and taxpayers against over payments. This blog will give you a basic understanding of the RAC audit, the common myths surrounding a RAC audit, and tips on how to prepare for a RAC audit.
Understanding the RAC Audit
Recovery Audit Contractors (RAC) are privately contracted audit firms that are given authorization to scour your organization’s records to identify and correct improper Medicare Part A & Part B payments. RAC audits are very comprehensive and quite lethal in nature as they can recoup payments up to a look back period of three years from the date the claim was paid or at the earliest October 1, 2007. RAC audit firms employ certified coders, nurses, therapists, and even a physician CMD so you can be certain that they have the technical knowledge to find any discrepancies. RAC auditors receive contingency payment meaning they are generally paid between 9 to 12.5 percent of the recouped amount as compensation. All the more reason for RAC audits to be more
aggressive and thorough in nature.
There are three types of RAC audit reviews described below:
Which HHAs are more likely to be given a RAC audit?
Common RAC Myths
Although RAC audits are deemed as one of the more serious audits, they are often exaggerated to the extent that people feel that their HHA is doomed once they receive a RAC audit request. Here are the top 10 most common myths circulated about RAC:
Preparing for a RAC Audit
Once you know that your HHA has been targeted for a RAC audit, you should immediately conduct an internal review. In some scenarios, it may be necessary for you to seek experienced legal counsel to mitigate the risk of the audit. Below is a set of guidelines your HHA might want to follow to be thoroughly prepared for your audit.
Remember the most important thing for any audit is to be organized and prepared. Do not assume that you can hide anything from the auditors as they have the skill and experience to find all of your issues. Therefore, I reiterate the importance of compliance. Agencies that use compliance driven software and follow best practices can and will fend off RAC attacks.