RAC audits just don't work, stakeholders say

BALTIMORE - CMS's assertion that expanding prepay reviews by recovery auditor contractors (RACs) will put an end to its "pay-and-chase" model of collecting improper payments doesn't hold water with HME stakeholders.

"You can't say with a straight face say that the RAC audits are a solution to pay and chase," said John Shirvinsky, executive director of the Pennsylvania Association of Medical Suppliers. "It still isn't nipping the problem in the bud."

CMS on Jan. 1 will roll out a three-year demonstration project in 11 states to identify improper claims before, not after, they've been paid. RACs will be paid contingency fees from the money saved by denying improper claims.

Financial incentives for the RACs have been a major bone of contention for stakeholders with CMS's fraud efforts all along.

"The whole idea of bounty hunters—it only leads to abuse when the auditor has so much discretion," said Walt Gorski, vice president of government affairs for AAHomecare.

Compounding the situation, stakeholders say: CMS's lack of oversight of the RACs.

"The RACs have an incentive to maximize recovery wherever they can justify the decision," said Neil Caesar. "If CMS doesn't police well, they can get away with more."

A report issued in July by CMS would seem to back that up. In an update on the current RAC program, CMS stated that the majority of providers who appeal RAC audits (64.4%) win. However, only 12.7% choose to appeal.

"I have always said fight because they are going to go where the easy pickings are," said Caesar. "If you are going to get audited and pay, you are going to get audited again."

Ultimately, until CMS figures out how to block fraudulent providers from the program in the first place, problems will continue for the agency, taxpayers and providers, say stakeholders.

"They are focusing on the technical failures of companies," said Shirvinsky. "That isn't the solution. The solution is to identify the ne'er do-wells upfront."