5 Ways to Prepare for a RAC Audit

All Durable Medical Equipment (DME) suppliers should be prepared and ready for a Recovery Audit Contractor (RAC) Audit. The RAC is part of the Medicare Fee for Service (FFS) Recovery Audit Program. The purpose of the FFS Recovery Audit Program is to identify and correct improper Medicare payments. The goal is for the Centers for Medicare & Medicaid Services (CMS) to implement actions that will prevent future improper payments in all 50 states.

5 Ways You Can Begin Preparing for a RAC Audit

Being prepared can help save you time and resources. Here are five ways you can prepare. 

1. Perform an Internal Audit 

This action will help you to determine the likelihood of coding and billing mistakes within your company.

2. Identify and Correct Coding/Billing Issues  

Look for any problem patterns and establish corrective actions to prevent ongoing mistakes.

3. Review Problem Areas

If you’re not sure where to start or what could be potential problems, review the following.

  • Consult Health and Human Services bulletins
  • Ensure quality time is spent on reviewing codes and bills 
  • Follow Federal Register recommendations
  • Ensure software is setup accurately 
  • Properly train staff 
  • Create staff procedures and ensure adherence

4. Check Documentation 

Ensure that all billing codes contain the appropriate medical record documentation. 

5. Find Assistance 

If you’re a growing company or need some extra help, bring on the experts. DME billing experts can review your coding and billing processes and help develop a clean audit process. 

RAC’s Responsibility 

Once a claim is selected, a RAC will review the claim(s) on a post-payment basis. The RAC’s job is to identify and correct improper payments, including under or overpayments on claims. 

Once RAC’s find an improper payment, the CMS, Carriers, Fracture Liaison Service (FLS), and Medicare Administrative Contractors (MACs) can carry out any action to prevent future incorrect payments.  

What does a RAC review during an audit?

The RAC will review post-payment claims during the last three years. They conduct three different types of reviews.

  • Automated 
  • Semi-automated 
  • Complex 

3 Common RAC Audit Questions

Below are three common questions regarding the RAC audits. 

Who is selected for a RAC audit?

Any medical practice that bills a government program can be subject to an audit. A list of common groups include: 

  • DME suppliers 
  • Home health agencies
  • Hospitals
  • Nursing homes
  • Physician practices

What can cause an audit?

RAC audits can occur if a claim was over or underpaid or has a claim error, including a simple documentation error. 

What to do if you’re selected for an audit?

Be sure to respond in a timely manner and follow all requests in the letter. Internally, you can begin reviewing the requested claim and prepare to file an appeal, if necessary.

Become Audit Ready with Medbill

Medbill has a DME billing team that is up-to-date on the ever-changing DME industry. We offer audit assist services with personalized support. Read more about our audit assist services here

Contact us today with any questions.  




Medicare Fee for Service Recovery Audit Program