audit, claim data, claim denial, CMS, RAC



  1. Terra, Sandra M. DHSc, MS, BSN, RN-BC, CCM, CPUR


Purpose/objectives: This article introduces the reader to the Recovery Audit Contractor (RAC) program supported by the Centers for Medicare & Medicaid Services, reviews the differences between the RAC demonstration project and the proposed permanent RAC, and provides guidance as to how to respond to the RAC when your organization comes under review.


Primary practice setting: The primary practice setting is the acute, inpatient hospital that accepts payment for Medicare beneficiaries.


Findings/conclusions: The RAC is inevitable and will be coming to your facility as mandated by the Tax Relief and Health Care Act of 2006, requiring expansion to all 50 states by 2010. There are some practical steps you can apply to mitigate the potentially negative impact on your facility and your case management department.


Implications for case management practice: The practice of case management continues to evolve, especially in the acute care arena. As the cost of healthcare continues to rise, checks and balances will be put into place to control or reduce these costs. Primarily, these checks and balances are regulatory in nature and have been met by case management departments as an additional task added to their current responsibilities. One of the most labor-intensive roles of these regulatory changes is the advent of the Centers for Medicare & Medicaid Services permanent RAC program. This program is likely to result in retrospective review and submission of appeals for a number of short (1-3 days) acute hospital stays paid for under the Medicare program. It is also likely that the case management department will be assigned the bulk of the clinical work related to RAC.