CMS recently released guidance relating to Medicaid RAC implementation in the form of an informational bulletin. The guidance outlines a new maximum contingency fee rate that states may pay to auditors who find improper claims dealing with durable medical equipment (DME). The rate is based upon a June 1, 2010 decision to increase the contingency fee by 5% to 17.5% for the recovery of improper payments associated with DME claims that were identified by the Medicare Recovery Auditors. Since contingency fee rates for Medicaid RACs are based upon rates paid to Medicare RACs the maximum rate for DME claims is now 17.5%. States wishing to pay Medicaid RACs a higher contingency fee may submit an exception to CMS for approval.

The guidance also introduces a “Frequently Asked Questions” page hosted by CMS for the purpose of clearing up operational and general questions pertaining to the rollout of state Medicaid RAC programs. The FAQ page can be found here:

http://www.cms.gov/MedicaidIntegrityProgram/04_What%20is%20New.asp#TopOfPage