In an experiment several years ago the Federal government piloted a program to efficiently identify underpayments, overpayments and identify fraudulent activity related the Medicare program. The Recover Audit Contractor (RAC) program was born. Under RAC private auditors review claims data and identify underpayment, overpayments, and indicators of fraud. The contractors propose a particular issue of interest and obtain approval from the Feds to pursue an audit relative to their suspicions. Armed with government approval and an incentive of about 12% of whatever monies they recover as their finders fee they set out to fulfill their mission – to make boatloads of money by catching providers’ mistakes.
The RAC program was very successful in helping recoup over a billion dollars for the government during the multi-year pilot. The program expanded to include Medicaid and covers all 50 states under the Affordable Care Act. Each state was required to award contracts to Recover Audit Contractors by 2012. Some states are challenging the requirements while other states have awarded their contracts. Many states have awarded contracts to multiple contractors.
The ACA stipulated a finders fee of 12% for the RACs. The RAC program is alive and well in several states. You better believe they are motivated to find their money in your pocket.
Fortunately, the RACs have not yet turned their attention to dentistry, which is most likely a good thing. Because dentists have enjoyed little scrutiny since the beginning of time they do not understand how their poor clinical recordkeeping habits leave them wide open to losing everything to fraud allegations, RAC audits and Medicaid Integrity Programs.
Your dental records, not OSHA or HIPAA are your greatest liabilities. It is time to sit up and pay close attention to the Affordable Care Act and how it will change your practices. Stay close and we will talk again soon!