Recovery Audit Contractors: An Invaluable Program Integrity Tool

This week, at the National Association for Medicaid Program Integrity (NAMPI) 2017 Conference, HMS® and the Texas Health and Human Services Commission Deputy Inspector General, Alan Scantlen, led a panel discussion on Medicaid RACs.

The Affordable Care Act (ACA) expanded the Medicare RAC program to Medicaid. RACs are charged with the identification of underpayments and overpayments, and the recovery of those overpayments. Governed by state and federal statutes and regulations, states enjoy significant and rightful latitude in developing their Medicaid RAC programs. As a result, no two programs are alike – leading to vastly different audit scopes across states and resulting recoveries.

Seven years after the advent of Medicaid RACs, HMS and HHSC look back on the program to share successes, challenges and future considerations.

Serving nearly 20 Medicaid RAC programs and Region 4 for Medicare RAC, HMS was pleased to offer best practices and lessons learned while cautioning against some of the pitfalls seen in both Medicaid and Medicare.

Some best practices discussed include:

  • Comprehensive, timely data sets;
  • Clear and transparent audit rules and processes;
  • Rotation of claim type and provider reviews; and
  • Proactive communication with, and education of, providers.

Some pitfalls to avoid include:

  • Unduly restrictive medical record request policies;
  • Ceding government’s inherent right and responsibility to oversee taxpayer funded programs due to provider and/or political pressures; and
  • Restrictions on audit techniques or claims and provider types subject to audits.

In parallel to the NAMPI conference, HMS released a report entitled “Medicaid RACs: Best Practices for Success.” The report was created to help strengthen the RAC program at a time when the improper payment rate hovers around 10 percent and states are asked to do more with less. It provides an analysis of RAC programs across the country and offers concrete examples to ensure a robust, yet balanced, sustainable and successful program.


Michele Carpenter is Senior Vice President of Government Services for HMS.