The CMS has begun the initial phase-in of its Recovery Audit Contractor program by announcing the four new contractors that will administer the program. Each RAC will be responsible for identifying overpayment and underpayments in approximately one-quarter of the country, according to the agency.
The contractors are: Diversified Collection Services, Livermore, Calif., which will initially cover the states of Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont; CGI Technologies and Solutions, Fairfax, Va., which will cover Indiana, Michigan and Minnesota; Connolly Consulting Associates, Wilton, Conn., which will cover Colorado, Florida, New Mexico and South Carolina; and HealthDataInsights, Las Vegas, which will cover Arizona, Montana, North Dakota, South Dakota, Utah and Wyoming.
Additional states will be added to each RAC region in 2009, according to the CMS.
The RAC program, initially pilot-tested in several states, was created to identify and correct improper Medicare payments paid to healthcare providers in fee-for-service Medicare. In July, the CMS reported the demonstration project recovered $1 billion in improper payments made since 2005.
HHS is required to make it a permanent, national program in all 50 states by Jan. 1, 2010. Hospitals and lawmakers nevertheless are concerned this bounty hunter type program will result in legal and administrative woes. Don May, vice president for policy with the American Hospital Association, said in an interview that the AHA plans on working with the CMS and new contractors through training programs and other modes of communication to make sure this is implemented in a methodical and fair way. -- by Jennifer Lubell