North Carolina’s Division of Medical Assistance (DMA) has implemented its Medicaid Recovery Audit Contractor (RAC) program, as required by the Patient Protection and Affordable Care Act (PPACA). The state’s current vendor, Public Consulting Group (PCG), will serve as one of two NC Medicaid RACs, with a second contract to be awarded later this year.

The RACs perform post payment audits to determine whether any Medicaid payments have been underpaid or overpaid, following federal and state guidelines. NC DMA received approval to establish one or more RACS in February 2011. The federal Medicaid Final Rule required states to implement their Medicaid RAC programs by January 1, 2012, or they would lose federal funding for the program.

Medicaid RAC regulations require the RAC to:

• Have at least one FTE medical director on staff;
• Hire certified coders, unless the state determines that certified coders are not necessary for the effective review of claims;
• Provide a toll-free customer service number which is available during normal business hours;
• Limit audits to a three-year look back period;
• Perform audits based on the number of medical records and frequency of reviews determined by the State; and
• Coordinate with other vendors or entities that perform post payment provider audits, including the Medicaid Investigation Unit (MIU) and the Centers for Medicare and Medicaid Services (CMS) Medicaid Integrity Program, to ensure reviews are not duplicative. However it is possible that entities may review the same claim for different purposes.

Click here to view Federal Regulations for the Medicaid RAC program.