Week 8
Purpose of Recovery Audit Contractor
Explain the history and purpose of the Recovery Audit Contractor (RAC) demonstration
project, as well as the process of the RAC as it pertains to its impact on healthcare
organizations.
Recovery Audit Contractor Demonstration Project
Recovery Audit Contractors (RAC) is the term used by the Centers for Medicare and
Medicaid (CMS) program that is responsible for detecting and correcting improper Medicare
payments (Harrington, 2020, p. 241). CMS (2019) explains that examples of improper payments
include excluded providers, unauthorized prescribers, and improper refills on DEA scheduled
drugs. The RAC demonstration project uses real auditors (Recovery Auditors) to go into the
health care setting and look for overpayments and underpayments as well as help to identify
future improper payments to lower the overall error rate for processing Medicare claims
(Harrington, 2020, p. 241-242). Harrington (2020) goes onto explain that CMS conducts as
many demonstration projects as needed to evaluate the program and make any chnages that
might be necessary (p. 242). Lastly, the RAC demonstration project is one that assesses the
effective of a service offered by CMS and is defined by the methods of service delivery,
coverage of new types of service, and new payment approaches on beneficiaries, providers,
health plans, states, and the Medicare Trust Funds (Harrington, 2020, p. 242). Evaluation
projects are also done. Harrington (2020) explains that evaluation projects confirm the findings
pf the demonstration project and allow CMS to monitor the efficacy of the program effectively.
There are many types of demonstration projects that are run by CMS. Harrington (2020)
explains that CMS is running demonstrations like Alternative Approaches to Measuring
Physician Resource Use, Assessing the Impact of Licensed Clinical Pharmacists to improve the
,
Purpose of Recovery Audit Contractor
Explain the history and purpose of the Recovery Audit Contractor (RAC) demonstration
project, as well as the process of the RAC as it pertains to its impact on healthcare
organizations.
Recovery Audit Contractor Demonstration Project
Recovery Audit Contractors (RAC) is the term used by the Centers for Medicare and
Medicaid (CMS) program that is responsible for detecting and correcting improper Medicare
payments (Harrington, 2020, p. 241). CMS (2019) explains that examples of improper payments
include excluded providers, unauthorized prescribers, and improper refills on DEA scheduled
drugs. The RAC demonstration project uses real auditors (Recovery Auditors) to go into the
health care setting and look for overpayments and underpayments as well as help to identify
future improper payments to lower the overall error rate for processing Medicare claims
(Harrington, 2020, p. 241-242). Harrington (2020) goes onto explain that CMS conducts as
many demonstration projects as needed to evaluate the program and make any chnages that
might be necessary (p. 242). Lastly, the RAC demonstration project is one that assesses the
effective of a service offered by CMS and is defined by the methods of service delivery,
coverage of new types of service, and new payment approaches on beneficiaries, providers,
health plans, states, and the Medicare Trust Funds (Harrington, 2020, p. 242). Evaluation
projects are also done. Harrington (2020) explains that evaluation projects confirm the findings
pf the demonstration project and allow CMS to monitor the efficacy of the program effectively.
There are many types of demonstration projects that are run by CMS. Harrington (2020)
explains that CMS is running demonstrations like Alternative Approaches to Measuring
Physician Resource Use, Assessing the Impact of Licensed Clinical Pharmacists to improve the
,
