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CMS Releases a New RAC Statement of Work

On September 12, 2011, The Centers for Medicare & Medicaid Services released a new Recovery Audit Contractor (RAC) Statement of Work. A number of updates and clarifications were made to the previous RAC Statement of Work. One addition institutes a new type of review known as a semi-automatic review. This is a new two-part review that can include both automated and complex reviews. The new Statement of Work also clarifies the difference between DRG Validation and Clinical Validation by adding definitions of each. The Statement of Work defines DRG Validation as the process of reviewing physician documentation and determining whether the correct codes, and sequencing were applied to the billing of the claim. Clinical validation is defined as a separate process, which involves a clinical review of the case to see whether or not the patient truly possesses the conditions that were documented. Another addition was clarification to the process known as “Allowance for a Discussion Period.” For example, if the recovery auditor is notified by the contractor during the discussion period that the provider initiated the appeals process, the recovery auditor shall immediately discontinue the discussion period and send the provider a letter stating that the recovery auditor cannot continue the discussion period once an appeal has been filed. Click here to view the entire RAC Statement of Work.

If you need assistance in preparing for, or defending against RAC audits, or implementing a compliance program geared toward identifying and correcting potential risk areas related to RAC audits, please contact a Wachler & Associates attorney at 248-544-0888.