Though the CMS didnt necessarily address all provider concerns with its Recovery Audit Contractor program rollout, one change that brought relief to California providers was the exclusion of PRG-Schultz International as an auditor.
PRG-Schultz was one of the most controversial RAC auditors in the demonstration project. The Atlanta-based company was the designated RAC for California during the demonstration and had a reputation for denying a large portion of the Medicare inpatient rehabilitation claims it reviewed in the state.
The California Hospital Association welcomed the CMS choice of Las Vegas-based HealthDataInsights to oversee the Western states in the permanent program and not PRG-Schultz. California also will be part of the second phase of the RAC programs rollout, in March 2009. It is well-known that hospitals in California had challenges during the demonstration stage of the program with the previous program contractor, PRG-Schultz, CHA said in a written statement. We are gratified that CMS took our concerns into consideration and selected HealthDataInsights to work with California providers during the permanent, national RAC program, CHA said.
In a statement, James McCurry, chairman, president and chief executive officer of PRG-Schultz, said the company was obviously disappointed in CMS decision and believes our proposal offered the best value to suit CMS recovery audit program needs.
The CMS criteria had been to award contracts in the four RAC regions to the lowest contingency-fee bidder that satisfied minimum technical requirements, with no single bidder being eligible for a contract award in more than one region. The company understands from CMS that it received one of the highest technical scores, but was not awarded a contract because it ultimately did not have the lowest contingency fee bid in any region, McCurry said in the statement.
The companys next step is to receive a debriefing from the CMS. Once we have reviewed the details behind the selections, we will evaluate all of our options related to the RAC procurement, McCurry said. The company was unavailable for further comment.
The three other contractors chosen for the official RAC program were: the Fairfax, Va., office of CGI Technologies and Solutions; the Wilton, Conn., office of Connolly Consulting Associates; and Diversified Collection Services, Livermore, Calif. HealthDataInsights and Connolly Consulting were both a part of the original RAC demo.
Rep. Lois Capps (D-Calif.), a harsh critic of RACs and of PRG-Schultz in particular, wrote in an e-mail she wasnt particularly surprised to see the recovery audit firm hadnt been selected given its huge problems during the demonstration program.