The RAC Facts

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By Erin Cammarata

You can walk through either one of my company's locations on any day and I can almost guarantee you will hear a conversation about a Recovery Audit Contractor (RAC) audit. Discussions can range from celebrating a win in the appeals department or being astonished by the collective number of audit requests that came across our desks in one day. Either way, the topic always offers fresh perspectives to write about.

In this article, I will review some RAC facts and offer a few refreshers and clarifications that I have identified through the large number of audits my company handles.

The RAC program was created through the Medicare Modernization Act of 2003 to identify and recover improper Medicare payments paid to healthcare providers under fee-for-service Medicare plans. In 2016, the Centers for Medicare & Medicaid Services (CMS) awarded Performant Recovery, San Angelo, Texas, the Region 5 national RAC. The RAC is paid on a contingency fee basis, receiving a percentage of the improper overpayments and, more rarely, underpayments they collect.

The auditors have a look-back period up to three years from the paid date of the claim. The number of RAC audits allowed in a 45-day period are "based on the supplier's tax ID number. Limits are set at 10 percent of all claims submitted for the previous full calendar year, divided into eight periods (45 days)." Each provider's individual limit is posted in the secure provider portal or on page two of an additional documentation request (ADR). But, for orthotics and prosthetics, there is a maximum allowable limit of ten audits per 45 days. For more information about the limits, visit

It is strongly recommended that all practitioners keep track of which O&P devices have been identified by the Office of the Inspector General as having high rates of fraudulent claims and therefore are likely to be targeted by the RAC for audits. You can find the list of CMS approved audit issues that Performant will be reviewing on its website at Click on the details link to review specifics of each approved audit issue. Here we can find that custom knee orthoses L-1844 and L-1846 were added to the list on September 14.

You can search for approved audits on the CMS site at It includes the same information as the Performant site but is easier to search for specific audits. This information is updated monthly.

My company recently experienced an increased number of denials for custom AFOs and KAFOs associated with a lack of detail documenting the fabrication process. Remember, per the Policy Article, "If the item is custom fabricated, a complete and clear description of the item, including what makes this item unique, and a breakdown of charges (material and labor used in fabrication), must be included with the claim. This information should be entered in the narrative field of the electronic claim." I recommend that the information also be contained in the patient's medical record.

If your audit comes back unfavorably, Noridian has a tool on its website, the Recovery Auditor Determination Decision Tree (, that walks you through your options based on the auditor's decision.

If you disagree with the unfavorable decision and wish to discuss it, you can complete a discussion period request form within 30 days from receiving the notice.

On the form, the discussion period is called a "physician-to-physician discussion" and you have the option to select yes or no. If you select yes, then a physician who is not a consultant or an employee for your practice must be the one partaking in the discussion. If you select no, then your audit will be sent back to Performant, with the new documentation submitted to be reviewed by a different auditor.

The discussion request form can be found on Performant's website at

It is imperative that we respond to all audit requests. These tools can assist you in successfully defending your audits.

Erin Cammarata is president and owner of CBS Medical Billing and Consulting. She can be contacted at