RD345 - Report on Contingency Fee-Based Recovery Audit Contractors (RACs) - November 2014


Executive Summary:
Recovery Audit Contractor (RAC) is a term used to describe auditing firms who review medical claims for over- and under-payments and are paid a contingency fee based on actual recoveries resulting from their audits. Starting in 2005, the federal government began to utilize RACs to audit Medicare claims, expanding the program nationwide in 2010. The success of the Medicare RACs resulted in the inclusion of Section 6411 of the Patient Protection and Affordable Care Act, H.R. 3590 (PPACA), which expands the current RAC program to Medicaid, requiring states to enter into a contract with a Medicaid RAC.