Earlier this year, the Centers for Medicare and Medicaid Services (CMS) temporarily suspended its recovery audit contractor (RAC) program while it clears up a lengthy backlog of Medicare claim appeals. Long-term care (LTC) providers immediately cheered the suspension, as they believe the program’s auditors are overly aggressive and issue questionable findings resulting in payment disruptions and lengthy appeals. The program’s auditors were disappointed by the suspension, believing the move will hurt taxpayers due to the fact that the program recovers billions of dollars in incorrect payments each year. A recent order by a federal judge will significantly impact the recovery audit contractor program.
The Courts Enter the RAC Program Fracas
The first step in restarting the recovery audit contractor program is awarding new contracts to program auditors. CMS recently allowed some auditors to begin reviewing new audit contracts. CGI Federal, a recovery audit contractor, filed suit against CMS, arguing that the terms of the current contract requisitions are unfair. CGI alleges that, under the contract’s provisions, it will take an inordinate amount of time for auditors to collect payments. CGI would like to amend the provisions to reflect standard commercial practices, which allow recovery audit contractors to issue invoices for their services immediately after the payer (i.e., Medicare) recoups the improperly paid claim.
CGI filed its claim with the U.S. Court of Federal Claims. The judge in the case, Mary Ellen Coster Williams, granted an injunction and ordered CMS to refrain from awarding any new contracts until CGI’s claim is fully adjudicated. This process can take up to 11 months to complete, but CGI requested it be expedited. Until then, CMS cannot award any new contracts to auditors, something that will benefit long-term care providers.
Long-term care providers should monitor CGI’s claim as it works its way through the legal system. In the meantime, providers interested in taking advantage of today’s low interest rates to refinance debt, acquire additional properties, or enter into sale/leaseback transactions, should look to the Chicago-based financingfirm Cambridge Realty Capital for assistance with these matters, and with a host of other senior housing financing transactions as well.
