Thoughts on RAC's
Thomas Cutler
Description
Collection
Title:
Thoughts on RAC's
Creator:
Thomas Cutler
Date:
8/5/2015
Text:
Dear Colleagues,
Not being so bright, I find myself going to the origin of a thing in order to understand it properly. I decided to return to the beginning with the whole concept of the RAC. A look at baby rac, if you will.
HR6111 Section 302 in 2006 introduces (h) Use of Recovery Audit ContractorsI have a question: In Paragraph (1) (B) (i) (payment)shall be made on a contingent basis for collecting overpayments; and
Now, forget about the fact that it finishes with a conjunction. My question is this: Does that sentence entitle the contractors to be paid for overpayments on a contingency basis?
Then I Googled recovery audit contractor and found the following. It was a presentation on the RAC and as one can see, it is from CMS (the Medicare CMS, not the Canadian Mathematical Society CMS-common mistake) <URL Redacted>
On CMS slide 13, things got curiouser and curiouser... This states:• If a RAC loses at any level of appeal, the RAC must
return its contingency fee
Again, I am just a prosthetist. My notes don't even count on behalf of my own claims, so I could certainly be wrong, but... It seems like this section allows the RACs to get paid a commission ahead of time on any claim until it is overturned. And if revenues are recouped, they are first in line for payment for stuff that won't get settled for three years. Doesn't that seem like promising to stay with your employer until you reach 65 and asking to get paid up front? Or perhaps I should have claimed a 4.0 GPA while applying to graduate school until I actually flunk those classes. See a disconnect?
Who loses? Sure, yeah, you do. But who loses who has a little clout...? What about a bunch of administrative law judges? The recovery audit contractors create a de facto delay by bombarding the ALJ and then sneaking off to earn interest on the judges' headaches. The result is that they get to extend the period during which they are able to retain the contingency fee. The longer the backlog, the more money in interest they make. This explains why in cases where there may be a single line which is disputed, they recoup the entire amount. If they get to hold on to $100,000 in contingency fees on asinine claims for three years, making 10% annually, they make 30% plus the extra compounded interest. Perhaps I could check with CMS to figure out what that exact amount is. That's 30% of money on sure losers.
Question: What if we requested that they change the statute so that the contractor is only paid for actual resolved amounts and was ineligible for contingency fees?
I believe that this ability to hold on to exorbitant amounts for negligible offenses is a direct result of that sentence. It has also made life hell for the administrative law judge. Am I wrong? Now we look at why Medicare doesn't seem to want to do anything about it:
So...I notice paragraph (1) (C) states that the Secretary shall retain a portion of the amounts recovered which shall be available to the program management account of the Centers for Medicare & Medicaid Services for purposes of activities conducted under the recovery audit program under this subsection and then halfway through this email I thought about how everyone in Washington is always hard-pressed for money. Well, almost everyone. The secretary gets to use recouped funds to pay for their RAC program management account. Perhaps this is the reason why we have been able to make so little headway on the RAC audit reforms-the Medicare folks look at us as though we are taking THEIR money. Any change to the program threatens their budget, right?
Our field is relatively small but has an excellent return on investment when it comes to public relations. Before you look at what that means to us, consider what that means to the politicians. They want to publicize how they are focusing on health care reform so that people will pay attention. Ask Dancing With The Stars what it did for their ratings. And it would be very convenient for that demographic to be so small that they cannot mount an effective counter-campaign.
But you have this nutball working WAY too late in Visalia, California. Before you know it, I'd be suggesting totally inappropriate counter-campaigns.
Thanks for looking at the baby rac with me. I understand that there may have been RAC updates which render some of these thoughts obsolete, but perhaps this continued dialogue will be helpful.
Good Night, Tom
Thomas J. Cutler, CPO, FAAOP, CPHMLimb.itless, LLCPO Box 1508Visalia, CA 93279559-334-3741 ph888-627-1151559-553-8837 fax
Not being so bright, I find myself going to the origin of a thing in order to understand it properly. I decided to return to the beginning with the whole concept of the RAC. A look at baby rac, if you will.
HR6111 Section 302 in 2006 introduces (h) Use of Recovery Audit ContractorsI have a question: In Paragraph (1) (B) (i) (payment)shall be made on a contingent basis for collecting overpayments; and
Now, forget about the fact that it finishes with a conjunction. My question is this: Does that sentence entitle the contractors to be paid for overpayments on a contingency basis?
Then I Googled recovery audit contractor and found the following. It was a presentation on the RAC and as one can see, it is from CMS (the Medicare CMS, not the Canadian Mathematical Society CMS-common mistake) <URL Redacted>
On CMS slide 13, things got curiouser and curiouser... This states:• If a RAC loses at any level of appeal, the RAC must
return its contingency fee
Again, I am just a prosthetist. My notes don't even count on behalf of my own claims, so I could certainly be wrong, but... It seems like this section allows the RACs to get paid a commission ahead of time on any claim until it is overturned. And if revenues are recouped, they are first in line for payment for stuff that won't get settled for three years. Doesn't that seem like promising to stay with your employer until you reach 65 and asking to get paid up front? Or perhaps I should have claimed a 4.0 GPA while applying to graduate school until I actually flunk those classes. See a disconnect?
Who loses? Sure, yeah, you do. But who loses who has a little clout...? What about a bunch of administrative law judges? The recovery audit contractors create a de facto delay by bombarding the ALJ and then sneaking off to earn interest on the judges' headaches. The result is that they get to extend the period during which they are able to retain the contingency fee. The longer the backlog, the more money in interest they make. This explains why in cases where there may be a single line which is disputed, they recoup the entire amount. If they get to hold on to $100,000 in contingency fees on asinine claims for three years, making 10% annually, they make 30% plus the extra compounded interest. Perhaps I could check with CMS to figure out what that exact amount is. That's 30% of money on sure losers.
Question: What if we requested that they change the statute so that the contractor is only paid for actual resolved amounts and was ineligible for contingency fees?
I believe that this ability to hold on to exorbitant amounts for negligible offenses is a direct result of that sentence. It has also made life hell for the administrative law judge. Am I wrong? Now we look at why Medicare doesn't seem to want to do anything about it:
So...I notice paragraph (1) (C) states that the Secretary shall retain a portion of the amounts recovered which shall be available to the program management account of the Centers for Medicare & Medicaid Services for purposes of activities conducted under the recovery audit program under this subsection and then halfway through this email I thought about how everyone in Washington is always hard-pressed for money. Well, almost everyone. The secretary gets to use recouped funds to pay for their RAC program management account. Perhaps this is the reason why we have been able to make so little headway on the RAC audit reforms-the Medicare folks look at us as though we are taking THEIR money. Any change to the program threatens their budget, right?
Our field is relatively small but has an excellent return on investment when it comes to public relations. Before you look at what that means to us, consider what that means to the politicians. They want to publicize how they are focusing on health care reform so that people will pay attention. Ask Dancing With The Stars what it did for their ratings. And it would be very convenient for that demographic to be so small that they cannot mount an effective counter-campaign.
But you have this nutball working WAY too late in Visalia, California. Before you know it, I'd be suggesting totally inappropriate counter-campaigns.
Thanks for looking at the baby rac with me. I understand that there may have been RAC updates which render some of these thoughts obsolete, but perhaps this continued dialogue will be helpful.
Good Night, Tom
Thomas J. Cutler, CPO, FAAOP, CPHMLimb.itless, LLCPO Box 1508Visalia, CA 93279559-334-3741 ph888-627-1151559-553-8837 fax
Citation
Thomas Cutler, “Thoughts on RAC's,” Digital Resource Foundation for Orthotics and Prosthetics, accessed November 25, 2024, https://library.drfop.org/items/show/237636.
