The Recovery Audit Contractor, or RAC, program was created through the
Medicare Modernization Act of 2003 (MMA) to identify and recover improper
Medicare payments paid to healthcare providers under
fee-for-service Fee-for-service (FFS) is a payment model where services are unbundled and paid for separately.
In health care, it gives an incentive for physicians to provide more treatments because payment is dependent on the quantity of care, rather than quality ...
(FFS)
Medicare plans. The
United States Department of Health and Human Services
The United States Department of Health and Human Services (HHS) is a cabinet-level executive branch department of the U.S. federal government created to protect the health of all Americans and providing essential human services. Its motto ...
(DHHS) is required by law to make the program permanent for all states by January 1, 2010, under section 302 of the
Tax Relief and Health Care Act of 2006
The Tax Relief and Health Care Act of 2006 (, ), includes a package of tax extenders, provisions affecting health savings accounts and other provisions in the United States.
Tax provisions
Extenders
The Act retroactively extended for two yea ...
.
History
In section 306 of the Medicare Modernization Act of 2003, the
United States Congress
The United States Congress is the legislature of the federal government of the United States. It is bicameral, composed of a lower body, the House of Representatives, and an upper body, the Senate. It meets in the U.S. Capitol in Washi ...
directed the DHHS to conduct a three-year demonstration program to detect and correct improper payments in the Medicare FFS program. DHHS, through its
Centers for Medicare and Medicaid Services (CMS) branch, began the program in 2005, using
Recovery Audit Contractors to perform the actual work of reviewing, auditing, and identifying improper Medicare payments. At the inception of the program, it focused on Medicare payments in the states of California, New York, and Florida. The program eventually expanded to Massachusetts and South Carolina before ending in March 2007. By the end of the demonstration, the program had recovered nearly $693.6M on behalf of CMS.
Jurisdictions
The RAC program divides the United States into four jurisdictions (regions A through D), each comprising approximately one quarter of the country, and contracts are awarded for each region.
Diversified Collection Services audits region A,
CGI Group
CGI Inc. is a Canadian multinational information technology consulting and systems integration company headquartered in Montreal, Quebec, Canada. CGI has a market value of $21.8 billion, making it one of the top 30 companies in Canada. The co ...
region B,
Connolly, Inc region C, and
HealthDataInsights region D. Each RAC may subcontract portions of its region.
PRG Shultz subcontracts for portions of regions A, B and D.
iHealth Technologies and
Strategic Health Solutions are also subcontractors for region A, while
Viant is a subcontractor for region C.
RACs are also active in other than government industries. Large players in this field are Connolly, PRGX and Transparent.
External links
RAC program overview
Medicare Modernization Act of 2003Primary Recovery Audit
Medicare and Medicaid (United States)