Several years ago, the federal government required states receiving Medicaid money (i.e., all of them) to institute the Recovery Audit Contractor, or “RAC,” program. A RAC is a private entity that contracts with a state to detect, and pursue recovery of, Medicaid moneys that should not have been paid, either through fraud or mere mistake. The RAC essentially operates with the power of the state, meaning it has access to claims data, inter alia, which it can “mine” to determine providers who bill more than the mean for certain types of services and billing codes, and then can obtain the provider’s records to review these billings and services. If the RAC obtains money back for the state, it then is entitled to keep a percentage of the recovery. These recoveries can be quite large, as witnessed by Grady Memorial Hospital in Atlanta recently paying nearly $3 million back to the State of Georgia as the result of a RAC audit.

If you are a physician or physician practice and receive a notice of a RAC audit, contact us at 404-233-4171. Chilivis, Grubman, Dalbey & Warner has represented physicians in dozens of RAC audits, and we usually are able to secure insurance coverage for at least some of the cost of complying