The RAC is Wrong!


Joe Osentoski, BAS, RN-BC

ADR and Appeals Specialist

Gateway Home Health Coding & Consulting LLC


Per CMS, the Medicare Fee for Service (FFS) Recovery Audit Program’s mission is to identify and correct Medicare improper payments through the efficient detection and collection of overpayments made on claims of health care services provided to Medicare beneficiaries, and the identification of underpayments to providers so that the CMS can implement actions that will prevent future improper payments in all 50 states. CMS RAC.


Or—that’s what it is SUPPOSED to do. When first implemented, the high volume of Recovery Audit Contractor (RAC) reviews and denials clogged the Medicare Appeals System and significantly contributed to the average over four year wait in getting an Administrative Law Judge Hearing that by regulation is to happen within 90 days of filing the request. OMHA Backlog


Due to substantial pushback from the affected health care providers, primarily hospitals, the RAC program was put on hold to allow for “improvements” to be implemented in the process. One big change is that Performant Recovery, Region 5, is the only RAC for all home health and hospice agencies in the country. Even after RAC audits were able to be restarted it took more than a year after being given the okay to post their first Audit Issue related to home health. Even now, only 1 of 44 Approved Audit Issues relate to home health RAC Work Issues.


Along with the number of postpayment claims the RAC can review now being significantly reduced, the new application of the RAC activity changed some of the procedures for responding to the result, provided a discussion period for the review findings, and delayed the RAC receiving payment until any appeal had been found unfavorable at Reconsideration level of review (by the Qualified Independent Contractor).


In May 2019, Seema Verma, Administrator of CMS, blogged on these changes to the RAC program. Verma Blog. In this, she states that “…in the past there were numerous complaints about the RAC program” and details several bullet points of improvements. But what I don’t see in those improvements is that the QUALITY of the review will be improved. And recent RAC results shared by home health agencies support that this is a MAJOR and CONTINUING issue.


Quite simply, when the written result of the RAC request is reviewed, if contains findings that are TOTALLY UNSUPPORTED by any actual CMS rule or regulation. Three examples will suffice to make my point:


“The documentation submitted does not support reasonable and necessary criteria for Home Health Services. Any increase in the frequency of services or addition of new services during a certification period must be authorized by a physician by way of a written or oral order prior to the provision of the increased or additional services. Services that are provided in the subsequent 60-day episode certification period are considered provided under the plan of care of the subsequent 60-day episode where there an oral order before the services provided in the subsequent period are furnished and the order is reflected in the medical record. Per coverage criteria, once the recertification assessment has been completed, all remaining skilled visits become null and void and if any more visits are to be scheduled, a new verbal order is needed to approve the visits to be made. Per submitted records, the RN performed the recertification assessment on 08/20/2017. Thus, the 2x day visits by the LPN on 08/21/2017, 08/22/2017, 08/23/2017, and 08/24/2017 were seen after the recertification visit without an additional order and are non-billable. The recertification assessment should be completed on last billable visit ordered in certification period.”


How is this wrong? Let me count the ways:

  1. Once the recertification assessment (OASIS) has been completed, all remaining skilled visits are NOT “null and void”!

  2. If there are to be additional visits made between the recertification OASIS visit and the end of that certification period, NO NEW VERBAL ORDER IS NEEDED!!

  3. And—the best one—there is obviously NO REQUIREMENT that the recertification assessment (OASIS) be the last billable visit in the certification period!!!

Let’s try another good one:

“The documentation provided for review does not support the services billed. The reason for the visits by the home health aide must be to provide hands-on personal care of the patient or services needed to maintain the patient’s health or to facilitate treatment of the patient’s illness or injury. Clinical notes should be written that they adequately describe the reaction of the patient to his/her care rendered. Upon review of the submitted records provided, the HHA visit notes are missing the beneficiary response to care provided at the time care was rendered.”


How is this one wrong? Let me count the ways:

  1. The statement related to the content of clinical notes is present in the CMS regulation: for SKILLED CARE.

  2. Home health aide service is NOT skilled care.

  3. NO such requirement for documenting “the beneficiary response to care provided” is found in the Medicare Benefit Policy Manual (MBPM), applicable portions of the Program Integrity Manual (PIM), or the Medicare Claims Processing Manual (MCPM).


Finally (for this blog, at least) I also get reports of home health service being denied because there is no Licensed Practical Nurse/Licensed Vocational Nurse supervision present or timely.

How is this wrong? Well…


  1. You will find NOT A SINGLE WORD for such a requirement in the Medicare Benefit Policy Manual (MBPM), applicable portions of the Program Integrity Manual (PIM), or the Medicare Claims Processing Manual (MCPM).

  2. It is quite simply NOT a payment issue or requirement.


Now, in their list of references used to support these absolutely bogus denials, the RAC will cite “Medicare Conditions of Participation.” To this, I would simply REMIND the RAC that per the Medicare Program Integrity Manual (PIM), Publication 100-08, Chapter 3, Section 3.3.2.5: “NOTE: Conditions of participation (COP) are not conditions of payment.” End of story!


So—now that you’ve received one of these unbelievable RAC letters—what do you do? Here’s a quick list of actions:

  1. Review the denial to see if it somehow valid. Valid denials should be accepted, learned from, and moved on. Invalid denials need further action.

  2. Follow the instructions and within 30 days request the Discussion. Of course you have to go to their website RAC Discussion Request Note that while requesting the Discussion, it is in many ways no different than filing an appeal due to the nature of the content and the response that the RAC expects.

  3. Jump through some more hoops, submit the request timely, and then review the record in relation to their cited references. Their form is basically putting your agency in the position of needing to explain how the RAC’s incorrect, invalid, and incompetent interpretation of Medicare requirements lead to the denial.

  4. Complete the Discussion process.

If the result of the discussion comes back unfavorable, I will find it amazing if any of the three Medicare Administrative Contractors (MACs) should uphold these reasons. The RAC has a strong incentive to maintain these denials—so hope that the MAC sees how erroneous they are.


And—no matter what Discussion action may be taken, submitting information on the RAC practices to CMS cannot be a bad thing. CMS provides the method on their RAC webpage “Do you have questions or concerns about the Recovery Audit Program? Please e-mail us at RAC@cms.hhs.gov. "Please Do Not send Personal Health Information to this e-mail address.”


If you have questions on the RAC’s review process, the validity of their denials, or how best to respond, I would recommend getting assistance to ensure you are not “wracked” by the RAC.


NOTE: even under the current Public Health Emergency (PHE) that has suspended new RAC activity FAQ, any claims denied can still be appealed: CMS has not stopped the appeals process. So even if the Discussion Period is missed you still have opportunity to get moving on appealing any wrong denials.

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©2019 BY GATEWAY HOME HEALTH CODING AND CONSULTING, LLC

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