• RAC Update: CMS Issues New Guidance
  • October 28, 2009 | Author: Catherine S. "Kate" Stern
  • Law Firm: King & Spalding LLP - Atlanta Office
  • CMS has released four new FAQs regarding Recovery Audit Contractors (RACs) since September 24, 2009. First, CMS clarifies when exactly the “discussion period” occurs, which had been a source of much confusion for providers because it is not a part of the Medicare appeals process. CMS explains that the discussion period begins when the provider receives the notification of RAC review results for complex reviews and when the provider receives the demand letter for automated reviews. This distinction arises from the fact that providers will not receive notification of RAC review results when claims are subject to automated reviews. CMS also explains that the discussion period lasts until the time when recoupment occurs. As the agency points out, however, the discussion period does not extend the provider’s appeal timeframes.

    Therefore, although the discussion period may continue beyond the issuance of a demand letter, providers that choose to enter into a discussion with a RAC need to be careful not to shift their focus entirely to the discussion because the clock starts ticking for submitting the first level appeal to the Medicare Administrative Contractor (MAC) as of the date of the demand letter. CMS further clarifies that the discussion period normally requires written notification to the RAC.

    In a second FAQ, CMS addresses some confusion surrounding the timeframe during which providers’ record request limits were calculated for audits conducted through September 30, 2009. CMS apologized for the confusion caused by the fact that the agency actually used 2008 calendar year claim volumes for calculating record request limits instead of 2007 claim volumes, as it had previously informed providers. CMS explained that 2008 data was used because by the time the RAC program was fully implemented after certain contracting delays, a full year of 2008 data was available. CMS acknowledged that some confusion may arise from its plan to use claims from the prior calendar year to determine record requests for the next fiscal year, and indicated it was exploring alternatives to this schedule.

    Third, CMS explains in a new FAQ that for those providers whose Fiscal Intermediary (FI) is WPS, their RAC is the RAC that has been assigned to their respective state. As WPS is a national FI, WPS will be working with all four RACs.

    Fourth, CMS admits in the newest FAQ that although the code N432 was specifically created to identify RAC adjusted claims on remittance advices (RA), there have been instances in which the code N469 has been used instead. N469 is the Section 935 Limitation on Recoupment code. CMS informs providers that it is working to correct the problem in the system. CMS noted that since providers will receive demand letters for all RAC adjusted claims (both complex and automated), providers can identify RAC adjusted claims and distinguish them from other adjustments based on these letters.

    CMS published final limitation on recoupment regulations on September 16, 2009. The new regulations permit providers to prevent CMS from recouping overpayments on claims that have been appealed to the MAC and the Qualified Independent Contractor (QIC). CMS has announced that it is hosting a town hall meeting conference call for providers about these new regulations on November 5. If you are interested in participating, be sure to pre-register by email.