World’s Greatest Fishing Expedition

Randy Schultz a health lawyer in Kansas City says of the RAC process in Kansas City, “It’s the world’s greatest fishing expedition is what it is.”

Jacqui Stanard, a health insurance specialist in CMS’s Kansas City regional office said audits officially began in the area in August of 2009.

But it took through the end of the year for the contractor — Las Vegas-based HealthDataInsights Inc. — to ready the computer program needed to run automated reviews of billing records.

She also noted:

The audits began with hospitals and other inpatient facilities and are starting to migrate to physicians’ offices.

Let’s take a look at this time line for a moment.

Audits officially began in August 2009…but, due to computer issues, the RAC didn’t actually start audits until the beginning of 2010.

It is now early April.

So, even if audits did begin in August of 2009, 8 months into this, they are beginning to tap physician’s offices.
That didn’t take long.

This article further notes:

Schultz’s frustration stems from cases such as the one he had with an orthopedic practice, which he said got flagged for billing Medicare for knee braces delivered to patients while they were in the hospital. The auditor said the hospital should have billed for the braces, even though the practice bought them.

“So,” he said, “that little subtlety right there caused the RAC audit to demand a refund.”

Another Kansas City attorney said the following:

Ross said her experience thus far has been that the audits have been catching obvious billing mistakes by providers.   The danger with the slow rollout is that it might cause providers to let down their guard. That would be a mistake, Ross said.   “The impact has been slower than expected,” she said. “That does not mean it’s going away.

Let me repeat that last sentence: “the impact has been slower than expected…that does not mean it’s going away.”

That should echo in your head for a while.

It is time to get ready…it will be ugly.

3 Year RAC Audit Lookback

As noted in the RAC SOW:

The RAC shall not attempt to identify any overpayment or underpayment more than 3 years past the date of the initial determination made on the claim.  The initial determination date is defines ad the claim paid date.

October 1, 2007 is the magic date, meaning, right now, RACs can only go back this far.  As of the writing of this post, that is about 2.5 years of lookback.

Once we reach October 1, 2010, lookback will be a moving 3 year window.


This is simply the time window in which a RAC can look, it is the furthest date in the past the RAC can review files.

So, if you have “bad files” beyond the lookback date, you are safe.

Until we reach October 1, 2010, you actually have a “bargain” review window, as the window is less than 3 years.