NC DMA Proceeds with Medicaid RAC Program

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.


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1 Comment

  • Sandra Brown MD

    As far as individual physician fraud, this fruit is high on the tree and small unless the RAC auditors game the system, which they are surely motivated to do. The vast waste is really in the unlimited spending on a relatively small number of very ill patients PLUS inappropriate utilization of ED services for minor problems (like diaper rash at 3 am!) PLUS the lack of tiered copays which allows individuals with enough resources for cigarettes, alcohol and expensive phones to be on medicaid.