CMS Issues 2007 Recovery Audit Contractor Status Document

On February 28, 2008, the Centers for Medicare & Medicaid Services (CMS) issued a report concerning the Recovery Audit Contractor (RAC) program for federal fiscal year 2007. The RAC program was implemented as a three-year demonstration project from March 2005 to March 2008, and was first rolled out in California, New York, and Florida.

The RAC program has been the subject of intense criticism by the provider community. In California, the RAC program focused on Inpatient Rehabilitation Facility (IRF) claims. CMS, however, has placed a “pause” on further RAC reviews of IRF claims and ordered it to review all IRF claims where it previously found an overpayment. Legislation has been introduced in Congress that would place a one-year hold on the RAC program.

Despite the criticisms of the RAC program, it is now a permanent program and CMS has been directed to implement it nationwide by January 1, 2010.

CMS issued a press release to accompany the report.