What states have issued Medicaid RAC RFPs?

Please see the State Activity section of this website for the most up-do-date results.

Is there a possibility that CMS may grant states with heavy managed care populations an exception?

To our knowledge, no state has been awarded an exception. Tennessee is a high Medicaid managed care state and they have procured and awarded this contract. We expect that CMS will offer clarification on how the Medicaid managed care population should be handled in the Medicaid RAC final rule.

What are RAC-like contracts?

The term RAC-like is used by states that have been operating recovery audit programs or contracts prior to the Affordable Care Act.

Did the Tennessee and New Mexico RFPs, which included auditing of MCOs, contain information on how they proposed to do this?

The RFPs contained minimal language on how the audits should be conducted. Interested contractors were, however, able to ask clarifying questions as part of the procurement process. In some instances the state was able to add some clarification. In other instances the questions were not clearly addressed. The most relevant example of a question needing clarity was on the subject of the validation of the overpayments for encounter data. It was not clarified how the contractor serving the state would be able to validate the overpayment, and whether the contractor would defer to the payment criteria of the Medicaid agencies or to the MCOs.

Does the Medicaid RAC requirement apply to the Territories—including Puerto Rico and the U.S. Virgin Islands?

Yes, the territories are included in the Medicaid RAC component of the Affordable Care Act.

What are the risks, if any, for MCOs if they decide to partner directly with Medicaid RACs?

Plans will need to explore the risks of this approach, as part of developing the relationship with the state(s). If they engage in joint auditing, then they will need to figure out what their exposure is, since the state contractor will know at a detailed level, about their provider contracts, payment methods, and overpayments. If they implement an “MCO RAC” that mirrors the state’s standards, and they operate an expanded RAC-like program that parallels—but is separate from—the state, plans can keep more control, and may reduce their exposure to being audited by the state.

Can you shed light on the scope of the Medicaid RACs?

While the Medicare RACs focus on acute care facilities, some states have already reached out to CMS and have been given feedback that CMS is not likely to approve a Medicaid RAC that doesn’t include a broader scope of services, such as home health, hospice, DME, long term care, and home and community-based waiver services. Further, as CMS focuses on the prevention of fraud, they are increasing their attention to excluded providers. This issue may well become an important part of the RAC initiative.

How much money are Medicaid RACs expected to recover?

Initially, CMS estimated that Medicaid RACs would recover $80 million in FY 2011, $170 million in FY 2012, $250 million in FY 2013, $310 million in FY 2014 and $300 million in FY 2015. These estimates were published in the proposed rule that came out in November 2010 before the implementation delays were announced.

How are the Medicaid RACs different from Medicaid MIC?

The most significant difference is that MICs are run and operated by CMS. With the RACs, CMS has delegated the responsibility to the states. For additional differences see our comparison chart here.