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Last Modified: 8/24/2011
Location: FL, PR, USVI
Business: Part A, Part B
June 15, 2011, ACT follow-up questions and answers
Medicare Part A/B Recovery Audit Contractor (RAC) Open Forum
The following questions originated in the above listed event. Each question is followed by the appropriate answer and the source of the information provided. For additional information or details, please refer to the frequently-asked questions (FAQs) page and the recording of the ACT on our FCSO Medicare training website, www.fcsouniversity.com 
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.1Q. We are receiving a new “Informational Letter” from the RAC, Connolly Healthcare, notifying us that they are investigating a potential overpayment and providing us the opportunity to submit additional information to support the billing of the service. What is an informational letter? Does this count towards the additional development requests (ADR) limits for medical record requests from the RAC?
1A. In addition to conducting complex and automated reviews, Connolly Healthcare recently implemented semi-automated reviews. A semi-automated review is conducted when an overpayment has been identified through an automated process but there is a low probability that it may not be overpaid. For this type of review, the RAC is issuing informational letters to give providers the opportunity to send medical documentation to support the billing of the service(s) before an overpayment is demanded.
Providing medical records in response to the semi-automated review letter is optional; therefore any records submitted to Connolly Healthcare do not count toward the ADR limits for medical records.
Source: Provider Outreach and Education
2Q. What should we do if we receive an “Informational Letter” from the RAC?
2A. If a provider receives an “Informational Letter” notifying them that Connolly Healthcare is investigating a potential overpayment, the provider may choose to submit additional information to support the billing of the service(s). If additional information is not submitted within the appropriate timeframe of 45 days from the date of the letter, or the RAC determines the submitted documentation does not support the billed service(s), the RAC will proceed with the overpayment determination.
Providers should not attempt to refund the potential overpayment or appeal the decision until Connolly Healthcare has issued an overpayment demand to the provider.
Source: Provider Outreach and Education
3Q. What if a medical record being requested was eliminated or cannot be located?
3A. Providers must respond within 45 days to a RAC request for medical records. Providers may request an extension prior to the 45th day by contacting the RAC.
Source: Provider Outreach and Education
4Q. Does the RAC impact Medicare Advantage Organization?
4A. No, not at this time. Currently, RAC contractors are responsible for identifying and correcting improper payments for the Medicare Fee-for-Service (MFFS) claims only. In March 2010, Congress expanded the role of the RAC program to include Medicaid and Medicare Parts C and D; however, these programs have not been implemented yet. Additional information will be published in the final rules of the Federal Register.
Source: Section 6411, Expansion of the Recovery Audit Contractor (RAC) Program
5A. How long does a provider need to keep a medical record?
5Q. State laws generally govern how long medical records are to be retained. However, the Health Insurance Portability and Accountability Act (HIPAA) of 1996 administrative simplification rules require a covered entity, such as a physician billing Medicare, to retain required documentation for six years from the date of its creation or the date when it last was in effect, whichever is later. HIPAA requirements preempt state laws if state laws require shorter periods. Your state may require a longer retention period.
Source: MLN Matters SE1022, Medical Record Retention and Media Formats for Medical Records
6Q. How often is a provider subject to a RAC audit? Will it happen only once a year or is there a certain period of time?
6A. There are no limits as to how often a provider may be audited or the frequency. RAC audits are conducted post-payment and limited to the services that have been approved by CMS and posted to Connolly Healthcare website. However, in response to feedback from the RACs, providers/suppliers and their associations, CMS has modified the additional documentation request limits for the RAC program. These limits will be set by each RAC (CMS) and will establish a cap per campus on the maximum number of medical records that may be requested per 45-day period. Additional information regarding the additional documentation limits is available on the CMS website.
7Q. If the RAC demands an overpayment on a claim paid more than one year ago, and the provider discovers that the claim contains a billing error, is it too late to request a reopening to correct the claim? Or should the provider file an appeal?
7A. If a provider receives a RAC demand for overpayment for a claim(s) containing a billing error, providers should follow the instructions outlined in the demand letter for appealing the decision if they wish to request a correction. Filing an appeal will stop the recoupment process. On the redetermination form, providers should clearly indicate that they received a RAC demand letter and wish to reopen a claim to correct a billing error(s). Make sure to include the necessary correction(s) and attach a copy of the RAC demand letter.
The provider must send the redetermination form and applicable documentation to the address listed in the RAC demand letter for redeterminations.
Source: Provider Outreach and Education
8Q. I received an “Informational Letter” giving me the option to submit additional documentation on a claim that the RAC has identified as potentially billed in error. I realized I made a clerical error on the claim. Can I correct the claim now before the RAC has made their final determination?
8A. If the RAC issues you an “Information Letter” to notify you about a potential overpayment on a claim, their goal is to provide you the opportunity to submit additional documentation to support the service. If you realize you made a billing error that you would like to correct on the claim, providers should not submit an appeal request to FCSO until the RAC has made the final decision and issued an overpayment demand letter to you.
Source: Provider Outreach and Education
9Q. How do Periodic Interim Payments (PIP) providers have their recoveries from RAC recouped?
9A. The PIP will be reflected on the Cost Report PS & R.
Source: Provider Outreach and Education
10Q. I received an overpayment demand letter from the RAC. I realized I billed the wrong “J” code. Is it too late to correct this claim?
10A. If a provider receives a RAC demand for overpayment for a claim(s) containing a billing error, providers should follow the instructions outlined in the demand letter for appealing the decision if they wish to request a correction. Filing an appeal will stop the recoupment process. On the redetermination form, providers should clearly indicate that they received a RAC demand letter and wish to reopen a claim to correct a billing error(s). Make sure to include the necessary correction(s) and attach a copy of the RAC demand letter.
The provider must send the redetermination form and applicable documentation to the address listed in the RAC demand letter for redeterminations.
Source: Provider Outreach and Education
11Q. How can I verify that Connolly has my correct information?
11A.You can contact Connolly Healthcare at 866-360-2507.
12Q. How far back can the RAC look when conducting reviews?
12A. RACs are able to look back three years from the date the claim was paid.
Disclaimer
This material is proprietary information of First Coast Service Options Inc. This material may not be duplicated, in whole or in part, for profit-making purposes. FCSO and its staff make no representation, warranty or guarantee this compilation of Medicare information is not error-free, nor that use of this information will prevent differences of opinion or disputes with Medicare.
