Recovery Audit Contractor (RAC) investigations are intended to identify improper payments of medical bills. RAC audits apply only to Medicare and Medicaid transactions. The purpose of these investigations is to ensure the government is neither over- nor undercharged and to prevent fraud.

Conducted by third parties, RAC investigations may be automated or complex. The total number of audits has decreased since revisions to the program in 2018. Even with these changes, medical professionals should ensure their billing system abides by current laws.

RAC investigations, or audits, do not directly tie into medical licensing. If, however, an audit uncovers the existence of fraud, you or your office may be reported to your profession's state governing board.

History

Recovery Audit Contractor (RAC) investigations first went nationwide in 2010. Overly zealous enforcement of the program led to revisions in 2018. The original program put an onerous burden on medical providers and overwhelmed the appeals process.

The updated RAC investigations require fewer documents and allow for class-action settlements. Contractors are also limited to requesting fewer documents and fewer audits within certain time frames.

Innocent Fraud

Even if not intentional, you may be liable for fraud in medical billing after a RAC audit. Some of the most common types of unintentional or innocent fraud include:

• Billing with an expired license
• Lack of proper supervision or oversight, including failure to provide sufficient time to review bills and claims for errors
• Billing patients for unused medication – e.g., a patient never picks up a medication, but your office still bills them
• Billing for a missed appointment – One exception is if your office has a written policy about charging when patients do not provide sufficient notification (usually 24 hours)
• Assumption of certain services – e.g., failure to communicate that a patient did not receive the usual treatment or certain parts of a treatment
• Submitting multiple bills for the same service

Pennsylvania's Medicaid Fraud reporting page provides a good example of what actions may constitute medical fraud.

In some cases, a patient's improper behavior may also open up your office or yourself to allegations of fraud. When a patient lies about their eligibility or identity or sells their prescriptions to others, that person's behavior may affect medical professionals who offer treatment.

That your actions were well-meaning, such as providing needed medical care to someone using another person's card, does not act as a defense. RAC audits do not consider your motives, only the end result. If the end result is that you committed fraud, you may be facing suspension or revocation of your license.

Addressing Allegations of Fraud

If, after a RAC audit, you've been accused of professional misconduct, you need to be proactive in your defense. What you need to do to protect your reputation and career depends on your profession and your state's specific laws involving misconduct or fraud.

Defense attorney Joseph D. Lento has the experience and skills in licensing defense and disciplinary proceedings for healthcare professionals. If you've been accused of misconduct or fraud after a RAC investigation or audit, call (888) 535-3686 or go online now.