Medicaid providers will be subject to new audits by Medicaid Recovery Audit Contractors (RACs), beginning in January 2012.
These new audits will be in addition to existing audits being conducted by Medicare RACs, Medicaid Integrity Contractors (MICs) and Zone Program Integrity Contractors (ZPICs), among others. “The Medicaid RAC audits, mandated as part of the 2010 Patient Protection and Affordable Care Act (the Health Reform Act), are expected to result in the recovery of $2.13 billion over the next five years.”
Medicaid RAC auditors will receive contingency fees of between 9% and 12.5% of amounts recovered as a result of overpayments, resulting in total contingency payments to Medicaid RACs of approximately $190 million to $266 million over the next five years. Medicaid providers will thus face audits from entities that have large financial incentives and resources to mount aggressive challenges to payments received from Medicaid programs.
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