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CMS Releases Its Final Rule Implementing the Medicaid RAC Program

Yesterday, the Centers for Medicare and Medicaid Services (CMS) released its Medicaid RACs final rule after previously delaying its expected April 1st implementation date. The Medicaid RAC program was created as a tool to fight Medicaid fraud and abuse, and the program shares many characteristics with the Medicare RAC program which has already recovered $670 million to date in 2011. The regulations are effective January 1, 2012.

According to the rule, “This final rule implements section 6411 of the Patient Protection and Affordable Care Act (the Affordable Care Act), and provides guidance to States related to Federal/State funding of State start-up, operation and maintenance costs of Medicaid Recovery Audit Contractors (Medicaid RACs) and the payment methodology for State payments to Medicaid RACs. This rule also directs States to assure that adequate appeal processes are in place for providers to dispute adverse determinations made by Medicaid RACs. Lastly, the rule directs States to coordinate with other contractors and entities auditing Medicaid providers and with State and Federal law enforcement agencies.”

Health and Human Services projects that the Medicaid RAC program will save taxpayers $2.1 billion over the next five years, of which $900 million will be returned to the states. Vice President Biden stated in a press release that, “if we’re going to spur jobs and economic growth and restore long-term fiscal solvency, we need to make sure hard-earned tax dollars don’t go to waste.”

If you need assistance in preparing for, or defending against Medicaid or Medicare 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.