New RAC Audit Demonstration to Begin in North Carolina

CMS has announced an August 27 start date for its Recovery Audit Contractor (RAC) Prepayment Review Demonstration. This demonstration will take place in 11 states, including North Carolina. It will perform admission necessity and correct coding prepayment review for eight medical severity-diagnosis related groups.

North Carolina was chosen for inclusion in the demonstration because CMS has identified it as having a high number of inpatient stays – not because North Carolina has been identified as an error-prone state.

Recovery auditors will begin by reviewing claims prior to payment to ensure that healthcare professionals have followed all Medicare rules. Initially, reviewers will focus on short stay inpatient hospital claims. CMS has stated that the goal of this program is to avoid improper billing before payment occurs, rather than audit on a “pay and chase” basis.

This week CMS held an Open Door Forum to discuss the demonstration and answer provider questions, including a list of the targeted MS-DRGs. Slides from this call are available here and a full transcript of the call will be available no later than August 16.


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1 Comment

  • Thomas Kline MD PhD

    Are these the folks that get a bounty?
    Imagine their income if they find nothing.

    In some states, consumer legislation requires
    a triple penalty if the consumer is wronged.

    If they make an error are they penalized?

    If not then I would gird for an unencumbered

    Never give up!! Don’t pay!! It just eggs them on. The Medical Thump card usually always wins. Just because things are listed as missing from the record does not mean they can deny. This is what Courts are for, to fill in the blanks.

    It is not true that everything has to be
    “documented” – an impossible task anyway.
    Testimony still counts! It will save the day if told in truth and in the Administrative Law Judge (ALJ) Court. Virtually all the “recoupments” are reversed
    in Court.

    Bounty “recovery organizations” depend on frightening providers that something is written down wrong or missing. Ask any Malpractice attorney how important the records are. Only to a degree. It is the
    testimonies that establish the truth.

    The Society can help a lot. Perhaps each
    facility or MD confronted by the “RAC” could notify the Society the minute they are being surveyed and given the tools to do battle, including how easy it is to go to Administrative Court and how important it is
    not to give up and pay what you really do not

    Remember, as soon as you throw in the towel
    and pay money for something that may not be
    wrong, then the RAC’s take their cut. Know
    your rights!!