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RAC Updates

July 7, 2014 0 Comments

RAC ‘n Rehab Series©~  Since the RAC “pause” in activities at the end of February have you been enjoying your summer, sitting at the beach and perhaps wondering about RAC updates? colorful umbrella on empty beach CMS had previously announced that the RAC contracts would be awarded beginning in May.  The Region 5 contract for Home Health, Hospice and DME was to be awarded in May, and the AB contracts for RAC regions 1-4 were to be awarded on or after June 20th.  CMS has recently announced that the contracts will be awarded no later than August 15, 2014.  This has been prompted by a hearing in an action in the US Court of Federal Claims brought by CGI Federal, the outgoing Region B RAC.  CGI Federal did not bid on the current round of RAC contracts, citing terms as “commercially uncompetitive” in that the RACs would not be paid until after the 2nd level of appeals.  Currently the RACs have been paid after the 1st level of appeals.  CGI protested the contract terms to the General Accountability Office (GAO), and their protest was denied, paving the way for CMS to award the contracts.

CGI Federal turned their attention to the US Court of Federal Claims, and in a June 6th hearing asked the court to bar CMS from awarding contracts.  The hearing resulted in a determination that CMS would not award the contracts for Regions 1,2 and 4 (the subjects of the CGI lawsuit), until after the court rules, or until August 15, 2014, whichever occurs first.

RAC Updates and Other Notable Items of Interest

There are currently four bidders for the RAC contracts for Regions 1, 2, 3, and 4.  These include current incumbents Connolly (Region C), HMS (Region D), Performant (Region A) and newcomer Sagebrush Solutions out of Dallas, TX.  Three of the four bidders bid on all four RAC regions, and one contractor bid on only one region.  Given that CMS has awarded the current four regions to four different contractors, it is likely that this pattern will continue, but given that the RAC regional map has been withdrawn not all providers will remain with their current RACs, even if they are awarded a contract for the same geographic region.  Once the contracts are awarded there may be award protests, and given CGIs recent protest activity, they are likely candidates to file an award protest if they are not successful in their action in the US Court of Federal Claims.

RAC Updates and Review of Therapy Claims

Once the contracts are awarded and activity resumes so will the process of manual medical review of therapy claims over the $3700 threshold.  To clear the backlog of all claims that have exceeded the $3700 thresholds the RACs (according to a CMS presentation to NARA Spring Conference attendees) will review all claims on a post-payment review basis until the backlog has been cleared.  Once the backlog is cleared, the RACs will resume reviewing claims on a pre-payment and post-payment review basis.  The therapy cap coalition representative group has announced plans to review this process with CMS, in large part due to the potential for a large amount of claims to be subject to ADR in a short time frame.  While CMS has also announced a potential modification to the ADR limits based upon provider compliance, it is unclear as to how this might apply to therapy providers during a time when the claims since late February have been piling up.

Do you have claims over the $3700 thresholds?  Do you know if you are in a prepayment of post-payment review state?  Have you started preparing to submit all claims (100%) for review this fall?

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Nancy Beckley

Nancy J. Beckley MS, MBA, CHC: President-Nancy Beckley & Associates LLC. Compliance outsourcing, risk assessment, compliance plans, compliance training, auditing, due diligence, investigation support for therapy providers.

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