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HOLD ON … More adjustments to the Medicare program

Kentucky will have a new Medicare Recovery Audit Contractor to perform post-payment review. The Centers for Medicare and Medicaid Services announced Oct. 31 that Performant Recovery will be the new Medicare RAC for the Commonwealth.

Recovery Audit Contractors in four regions perform post-payment review to identify and correct Medicare claims that contain improper payments (overpayments or underpayments) that were made under Part A and Part B, for all provider types, except for durable medical equipment, prosthetics, orthotics, and supplies and home health/Hospice.)

Performant Recovery, like all other RACs, will be paid on a contingency basis for each overpayment and underpayment discovered during an audit. The contingency fee for Performant has not yet been published.

Medicare RACs have been auditing physicians and hospitals since 2009, often identifying thousands of dollars in overpayments in a single audit. Historically, both physicians and hospitals were often successful in achieving audit “reversals” during one of the five levels of Medicare appeals. Provider appeals became so successful physicians and hospitals started to appeal RAC audits routinely, which proved disastrous for Medicare as the appeals backlog climbed to unmanageable levels. Last year, Medicare started offering settlements to health care providers simply to reduce the appeals backlog.

Despite problems with appeals, CMS maintains the RAC program is necessary and has recovered $8 billion in improper payments since 2009.

Some important changes with the new RAC contracts include:

  • Inpatient claims review – no more than six month look-back period (previously three years)
  • Quality Improvement Organizations will be first to evaluate shorter patient stays (claims)

For more information, you may contact Performant customer service at 1-866-201-0580 or by email at

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