Volume of referrals, appeals are concern with RACs
A state plan amendment submitted by North Carolina Medicaid to the Centers for Medicare & Medicaid Services (CMS) to participate with the Medicaid recovery audit contractor (RAC) program has already been approved, and a request for proposal will be released shortly, reports Brad Deen, a spokesperson for North Carolina Division of Medical Assistance (NCDMA).
"Medicaid RACs were not intended to totally replace any state program integrity or audit initiatives or programs," says Mr. Deen. "North Carolina sees this as a way to enhance its efforts. It offers a different way to leverage resources and financing of program integrity efforts."
The state has a year to attempt to recover an overpayment identified by a RAC from a provider, except in cases of fraud where the time period may be longer, notes Mr. Deen, and the federal share must then be returned regardless of whether the overpayment is recovered.
"However, if a determination is overturned on appeal, the NCDMA can request a refund of the federal share," adds Mr. Deen. The main impact of the CMS requirements will be on the state's DMA hearing office appeal processes for providers to dispute adverse determinations made by Medicaid RACs, he says.
"Our state currently does not have adequate staffing resources to handle the possible influx of provider disputes," says Mr. Deen, explaining that North Carolina's appeal process for providers is more extensive than what is federally required.
Providers can request a redetermination when they are dissatisfied with the overpayment decision, he explains, and a redetermination must be submitted within 30 days to prevent offset on day 41. To comply with the requirement that the Medicaid RAC refer suspected cases of fraud or abuse to North Carolina Medicaid in a timely manner, Mr. Deen says that NCDMA will need to review findings for accuracy and forward these to the state's Medicaid Fraud Investigation Unit.
"Due to the expected increase in referrals, this could be a staffing and resource issue," says Mr. Deen. The Medicaid RACs must review Medicaid claims with a three-year maximum claims look-back period submitted by providers to NCDMA of services for which payment may be made under the state plan or a waiver of the state plan to identify overpayments and underpayments, he says.
"This will place additional constraints on DMA sections to obtain timely claims data reports for our RAC vendor review," Mr. Deen says. "The alternative will be to give RACs direct access to paid claims and not run the request through the Medicaid Data Section. This will change the business flow."
Possibility of savings
If the state pays RAC fees on an identified overpayment, and the provider prevails at any stage of the hearing process, RAC would be required to return any portion of the fee that corresponded to the amount of an overpayment that was overturned at any level of appeal, notes Mr. Deen. The appeals process can take over a year, he says, and North Carolina already has an extensive provider appeal process.
"The expected increase in appeals will add to the work load," he says. "A RAC would go unpaid for all its cases in the initial years while providers exhausted their appeal rights."
NCDMA has an obligation to coordinate auditing efforts to reduce the overburdening of Medicaid providers, adds Mr. Deen, and also to ensure that RACs do not duplicate or compromise the efforts of other entities performing audits.
North Carolina already has a post-payment review process in place with contracts working off contingency, reports Mr. Deen, and the department has seen a marked increase in recoupments.
"So there are greater opportunities to increase savings through collection if providers have not gone out of business or gone bankrupt," he says. "Otherwise, the RAC efforts could end up costing the state money."