Contractors can now conduct “medical necessity” audits at your medical laboratory
Clinical laboratories and anatomic pathology groups will have new legal responsibilities to perform as of December 31, 2010. That’s when the Medicare Recovery Audit Contractor (RAC) program expands to include Medicare Part C, Part D, and all 50 state Medicaid programs. The expanded RAC program gives independent auditors the power to conduct “medical necessity” audits at your hospital, health system, clinical laboratory, or pathology group.
Many healthcare executives are critical of how the Medicare RAC program will be implemented. Four private companies have been selected by the federal government to conduct RAC Audits. Each RAC auditor will be paid on a contingency basis. RAC contractors are thus motivated to identify improper payments. RAC auditors can analyze claims with payment dates going back to October 1, 2007. The possible consequences are severe because every RAC audit has the potential to reveal Medicare fraud or abuse issues. Thus, a RAC audit can bring added legal exposure to your medical laboratory or pathology group. (more…)