RAC Audits Under Scrutiny

Learn how MACs piggyback on RAC audits.

A question that I get often is “Do I have to submit the same medical records to my Medicare Administrative Contractor (“MAC”) that I submit to a Recovery Audit Contractor (RAC) for an audit?”

The answer is no. Providers are not required to submit medical records to the MAC if submitted to a RAC but doing so is encouraged by most MACs. There is no requirement that you submit to the MAC what you submit to RACs. This makes sense because the MACs and the RACs have disparate job duties. One of the MACs, Palmetto, instructs providers to send records sent to a RAC directly to the Palmetto GBA Appeals Department. Why send the records for a RAC audit to a MAC appeals department? Are they forecasting your intentions? The instruction is nonsensical unless ulterior motives exist.

RAC audits are separate from mundane MAC issues. They are distinct. Quite frankly, your MAC shouldn’t even be aware of your audit. (Why is it their business?) Yet, many times I see the MACs cc-ed on correspondence. Often, I feel like it’s a conspiracy – and you’re not invited. You get audited, and everyone is notified. It’s as if you are guilty before any trial.

I also get this question for appeals. “Do I need to send the medical records again? I already sent them for the initial review. Why do I need to send the same documents for appeal?” I get it – making copies of medical records is time-consuming. It also costs money. The answer is yes. This may come as a shock, but sometimes documents are misplaced or lost. Auditors are humans, and mistakes occur. Just like providers are humans and 100 percent of Medicare regulatory compliance is not required. People make mistakes; those mistakes shouldn’t cause financial ruin.

“Do the results of a RAC audit get sent to your MAC?” The answer is yes. Penalties penalize you in the future. You must disclose penalties, and the auditors can and will use the information against you. The more penalties you have paid in the past clearly demonstrate that you suffer from abhorrent billing practices. In fact, Medicare post-payment audits are estimated to have risen over 900 percent over the last five years. Medicare provider audits take money from providers and give to the auditors. If you are an auditor, you uncover bad results or you aren’t good at your job.

Politicians see audits as a financial win and a plus for their platform. Reducing fraud, waste, and abuse is a fantastic platform. Everyone gets on board, and votes increase.

Appealing your RAC audits is essential, but you must understand that you won’t get a fair deal. The Medicare provider appeals process is an uphill battle for providers. And your MACs will be informed.

The first two levels, redeterminations and reconsiderations are, basically, rubber-stamps on the first determination. The third level is the before an administrative law judge (ALJ) and is the first appeal level that is before an independent tribunal. The False Claims Act (FCA) is the ugly stepsister to regulatory non-compliance and overpayments. The government and qui tam relators filed 801 new cases in 2022.  That number is down from the unprecedented heights reached in 2020 (when there was a record 922 new FCA cases) but is consistent with the pace otherwise set over the past decade, reflecting the upward trend in FCA activity by qui tam relators and the government since the 2009 amendments to the statute.

See the chart below for reference:

Programming Note: Listen to Knicole Emanuel’s live RAC Report every Monday on Monitor Mondays at 10 Eastern.