Financial Audit Manual

I. INTRODUCTION

Prepare for the audit activity has increased Medicare! The Centers for Medicare and Medicaid Services (CMS) Recovery Audit Contractor (RAC) program was made permanent, is expanding nationally, starting this year. Radiology providers must act now to ensure they have adopted and implemented appropriate compliance programs. Radiology providers must make efforts to understand the appeal process and health insurance should know that many strategies exist that can be used successfully in the appeal process checks to defend Medicare.

II. RECOVERY AUDIT CONTRACTORS

Article 306 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) directed the Department of Health and Human Services (HHS) to conduct a pilot program three years with CCR. The event began in 2005 in the three states with the highest expenditures for health insurance: California, Florida and New York. RACs were responsible for identifying and correcting overpayments of insurance or inadequate, and were compensated on a contingency basis. The objective of the demonstration program was to determine whether the use of RAC is cost-effective to identify and correct bad Medicare payments.

The RAC demonstration program has been very "profitable" in terms of CMS. During the three-year demonstration, the RACs identified and collected 992.7 million dollars in overpayments and repaid $ 37.8 million in underpayments to Medicare providers and suppliers. Based on information compiled by CMS, the RAC demonstration program only cost 20 cents for every dollar returned to the Trust Fund for health insurance.

Section 302 of the Tax Relief and Health Care Act of 2006 made the RAC program permanent and requires the expansion of the RAC program nationally later in 2010. CMS is actively moving forward with this expansion now. During the last months of the demonstration program, RACs expanded in South Carolina, Massachusetts, and Arizona. CMS plans to expand to 19 states in the summer of 2008, four states most in autumn 2008, and other states in January 2009 or later. CMS plans to announce the names of "permanent RAC" sellers shortly after July 31, 2008. providers of radiology in the first 19 states can expect the entry into force of the RAC audit activity shortly after the announcement of the CAR "permanent" vendors.

Although RCCs are responsible for correcting inadequate and that the overpayment is the process of recovering the alleged overpayments that is particularly important for Medicare providers. During the three-year demonstration, the RACs identified and collected 992.7 million dollars in overpayments and recovered only 37.8 million U.S. dollars in insufficient providers and health insurance providers. Thus, approximately 96 percent of payments would have been misidentified were overpayments, as opposed to underpayments. RACs are permitted to attempt to identify improper payments resulting from one of the following:

? Incorrect payments;
? Not covered services (including services which are not reasonable and necessary);
? Miscoded services (including DRG coding errors), and
? The duplicate services.

During the demonstration project, Medicare providers and suppliers raised concerns about some aspects of the RAC. CMS has made efforts to address these concerns and has adopted many changes to implement the ongoing program. Some of these changes are as follows:

? As part of the RAC demonstration program, RACs have been allowed to reopen claims up to four years after the initial payment date. Amid arguments that the period of four years of back violated the supplier "no fault" provisions of th.