A. L. Russell & Associates

What is RAC?

A Recovery Audit Contractor (RAC) will at some point audit your practice to identify non‑MSP Medicare claims for which payments were made under part A or B of Title XVIII of the Social Security Act.  The purpose is to identify claims that were overpaid or underpaid by Medicare.  If the RAC finds that compliance to Medicare billing rules is not up to standard, penalties may be assessed, in a range from fines to loss of Medicare billing privileges.

How does RAC affect me?

Medicare has contracted for 2009 and beyond to audit every physician, hospital, home health agency, and durable medical equipment provider that files claims with Medicare.  The process is expected to be fully and permanently in place by 2010 in all 50 U.‍S. states and in Puerto Rico.

What’s the benefit of having you do a baseline audit?

The baseline audit will determine your compliance with the CMS rules at the time of the audit.  If you recognize your vulnerabilities in noncompliance to Medicare rules, you can promptly change the way you maintain documentation or the way you code your services.

Why would I want a third party to conduct a baseline audit?  Why not wait for the official RAC audit?

Medicare gives the provider no guidance other than written guidelines, which most providers don't take the time to review.  Because the official RAC auditors are paid a contingency-based fee, they have incentive to find incorrectly paid claims.  Our baseline audit will help you identify deficiencies and correct those before the RAC audit.

How does your audit service work?


It’s fairly simple:

1. After we receive payment from you, we provide you with a list of the five office visit codes for which we need files.
2. Your office staff faxes the requested information from 50 random charts to our secure HIPAA-compliant fax line.
3. Our certified coding auditors analyze the files and generate a report within about a week.
4. We schedule a time to go over the report with you and consult on corrections that you may need to make.

If my practice has a high volume of claims, can you audit more than 50 files?

For our baseline audit, 50 files should be sufficient to determine if you have a major problem.  If a major problem appears, we’ll provide specific recommendations on auditing more files.

What if my state is not scheduled to roll out until a later date?


The schedule for the rollout is at this website: www.cms.hhs.gov/rac

You should not wait for the official RAC to come to your office.  The purpose of our baseline audit is to prepare you for internal changes to documentation or coding that you need to make.  The CMS will target a specific range of dates of service. Our role is to identify areas of noncompliance.

What’s the incentive for us to have this baseline audit done now instead of later in the year or next year?

The purpose of our baseline audit is to identify noncompliance of documentation, coding, and billing and to give you guidance on all corrective actions that you need to take before the RAC audit.

If your baseline audit of my records is clean, how often should the audit be redone?  That is, when the RAC comes to perform the audit, how recent does our baseline audit need to be?

We recommend that the baseline audit be done yearly.

If I have a baseline audit certificate, will I still be subject to the RAC audit?

Yes.  You’ll receive a Certified Coding Auditors report, but this won’t prevent the RAC auditor from doing the government-sponsored audit.

Where can I find more information about the RAC audits?

A comprehensive explanation of the RAC program is at this website: www.cms.hhs.gov/rac