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David McGill Blogger

Some RAC Slack?

Posted by David McGill | July 25, 2013

AOPA has reported that multiple members in the midst of RAC audits have seen those audits suddenly end. When those AOPA members asked why, they say that RAC representatives advised them that Medicare has instructed the RACs to cease and desist from auditing any claims filed before August 2011.

If true, what does this mean for you?

1. No More Pre-August 2011 Audits

If this anecdotal evidence proves true and represents Medicare's new policy towards RAC audits, it prevents the RACs from retroactively enforcing the documentation requirements outlined in the Dear Physician letter of August, 2011. One of the O&P profession's central complaints about the Dear Physician letter has always been that the RACs unfairly applied new documentation standards to claims that couldn't possibly satisfy those standards because the claims predated their publication. In fact, this issue goes to the core of AOPA's recently-filed lawsuit against Medicare.

In its complaint AOPA argues that (1) the August 2011 Dear Physician letter amounted to new rulemaking by fiat, instead of through the appropriate public notice and comment period, (2) Medicare failed to provide a reasonable basis for the new rules, and (3) Medicare applied the new rule retroactively to claims filed before the Dear Physician letter's publication (i.e., to claims before August 2011). See AOPA Complaint, paragraphs 2-4. (Incidentally, Medicare filed its motion to dismiss AOPA's complaint earlier this week, and its basic response to these allegations is that the Dear Physician letter didn't constitute new rulemaking, but rather, simply reiterated already-existing documentation standards outlined in the Program Integrity Manual. It's important to remember that, as we'll discuss below.)

2. RACs Still Exist, and They'll Still Audit You

Medicare has not disbanded the RACs, thanked them for a job well done, given them a gold watch and told them to enjoy an early retirement. If the information AOPA is getting is correct, it simply means that the RACs' focus will shift from older claims to newer ones. 

If you now comply with the Dear Physician letter's requirements, that should be a good thing overall. As we noted in our July 21 post regarding the OIG's report on MAC Region C claims, "If you have already adjusted your practices based upon the August 2011 'Dear Physician' letters and closely adhere to the Local Coverage Determination requirements, you should continue to follow those processes and move forward confident that your approach satisfies Medicare's requirements." 

On the other hand, if your sole response to the Dear Physician letter was, "Hey, that's not fair," the only thing that has changed is which claims you'll now lose when audited, not the likelihood of winning.

3. Brace for Battle

If the RACs indeed stop auditing claims filed before August 2011, you can bet they're going to try to enforce the Dear Physician letter's requirements on claims after that date with a vengeance. One of the arguments that some O&P's used when appealing RAC decisions - successfully, based upon our discussions with practitioners - was that the RACs couldn't fairly apply new standards to old claims. This potential change in auditing policy deprives you of that argument.


All in all, if the information provided to AOPA proves true, you're potentially in a better position today than you were yesterday. At the same time, however, don't mistake this purported shift in auditing policy for an outright win. 

The RACs will continue to audit. Medicare has taken the position that the Dear Physician letter merely clarifies always-existing Medicare policy. Your claims after August 2011 - that's 24 months worth of data - remain in play. 

Dot your i's and cross your t's. You're in Round 1 of a 15 round fight. You may be ahead on points right now, but that doesn't mean you still can't get knocked out. 

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