Medicaid Recovery Audit Contractor (RAC) Provider Reviews

Pursuant to Federal law, 42 U.S.C. § 1396a(a)(42); 42 C.F.R. § 455.500 et seq., the Commonwealth of Pennsylvania, Department of Human Services (department), Bureau of Program Integrity (bureau) established a Recovery Audit Contractor (RAC) Program for fee-for-service provider reviews, focusing on short-stay inpatient hospital services. The existing contingency-fee RAC contract with Health Management Systems, Inc. (HMS) expired May 31, 2019.

The department requested and the Centers for Medicare and Medicaid Services (CMS) granted an exception to continuing the RAC Program, effective June 1, 2019 for a period of two years. The bureau has worked with the HMS-RAC to transition outstanding reviews to the bureau for resolution.

The department’s program integrity activities are executed in both the fee-for-service and managed care environments with strong oversight, coordination, and follow-up. Moreover, the department has a well-defined oversight and monitoring process for the program integrity responsibilities of its managed care organizations and managed care network providers. It is the department’s intent to routinely conduct reviews of both short term and extended stay admissions to ensure compliance with state and federal regulations.

The department will continue to coordinate review efforts with other contractors or entities performing audits of Medicaid services and payments. In addition, the department will make referrals of suspected fraud and/or abuse to the Office or Attorney General, Medicaid Fraud Control Section or other appropriate law enforcement agencies.