Recovery Audit Program (RAC) demand letters now coming from Medicare Administrative Contractors (MACs)

Beginning Jan. 3, the Centers for Medicare & Medicaid Services (CMS) shifted responsibility for issuing Recovery Audit Program (RAC) demand letters from the Recovery Audit Contractors (RACs) to the Medicare Administrative Contractors (MACs). The change, announced last summer, is an attempt to reduce delays in issuing demand letters, which can count against a provider's time to rebut a finding.

The model demand letter from CMS, which references the Recovery Audit Program in the second paragraph and uses a “Letter Number” beginning with an “R” to indicate the finding is coming from a RAC. While CMS originally stated that the demand letters would include contact information for the RAC, they do not currently contain that information. Contact information for each of the four RACs can be found on the CMS Web site.

This process change comes as CMS reports that the RAC program identified $939.4M in overpayments and underpayments in FY 2011, up from $92.3M in FY 2010.