Question

In two to three paragraphs summarize and explain the following.

In healthcare what is the purpose Recovery Audit Contractor (RAC)?

Answer 1

The Recovery Audit Contractor, or RAC, program was created through the Medicare Modernization Act of 2003 (MMA) to identify and recover improper Medicare payments paid to healthcare providers under fee-for-service (FFS) Medicare plans.

The purpose of a RAC is to audit Medicare claims and determine where there are opportunities to recover incorrect payments from previously paid but noncovered services (including services that were not medically necessary), erroneous coding, and duplicative services. RAC's review claims on a post-payment basis. The RAC's detect and correct past improper payments so that CMS and Carriers, FIs, and MACs can implement actions that will prevent future improper payments.