CMS Postpones Launch of National Recovery Audit Contractor Program for State Medicaid Claims

For the past few years, CMS has used private Recovery Audit Contractors (RACs) to recover overpayments from providers participating in the Medicare program. After passage of the health care reform act, however, CMS's authority to hire RAC auditors was expanded to include audits of state Medicaid claims as well. By law, all state Medicaid programs were supposed to have RAC audit programs in place by April 1, 2011. The states must also institute an appeals process for providers disputing the RAC auditors' findings. Not surprisingly, given the states' budgetary strains and operational hurdles, the vast majority of states were not able to comply with this timeframe. CMS recently announced that the implementation deadline will be pushed back to a later date. CMS will announce the new deadline by a final rule to be published later this year.

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