HHS Releases Medicaid RAC Final Rule

The Department of Health and Human Services on Wednesday released a final rule implementing Section 6411 of the Patient Protection Affordable Care Act that calls for states to create and maintain a relationship with a “Recovery Audit Contractor” to identify improper payments and fraud within individual state Medicaid systems.  HHS expects the Medicaid RAC program to recover $2.1 billion over 5 years, much of which will be returned to individual states. The final rule is effective January 2, 2012 and provides guidance to states on the following:

– State/Federal start-up costs associated with contracting and maintaining a relationship with RAC’s

– Creates payment methodology for RAC auditors from individual states (similar to Medicare RAC’s, 10-12% of recovered funds)

– Directs States to assure that adequate appeal processes are in place for providers to dispute adverse determinations made by Medicaid RACs.

– Directs states to coordinate with other contractors and entities auditing Medicaid providers and with State and Federal law enforcement agencies.

Much like the Medicare RAC program which HHS touted as having already saved $668 million in 2011, the Medicaid RAC program forces states to contract with third-party auditors and allow them to keep a contingency fee (10-12%) based on the amount of provider payments identified as improper.  Orthotic and Prosthetic professionals must continue to keep a watchful eye on maintaining accurate records and billing proceedures as the implementation of these RAC’s comes to fruition next year. The final rule issued on Wednesday is effective January 2, 2012. 

Read the full text of the HHS Final Rule HERE

Read OPGA Government Effects blog coverage of the Medicaid RAC final rule delay earlier this year by HHS, HERE

 

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