RACs, ZPICs and Other Wild Things: The Eye Care Leaders Guide To Auditors

Heads up, ECPs: There are lots of auditors out there trawling around your claims, hunting for coding and billing mistakes that give payers a reason to slow or revoke payments.

You can’t escape them, even if you’ve opted out of federal health program reimbursements. Even private payers are auditing much more aggressively. The multiple species of auditors and their bizarre acronyms can make your head spin. We’ve rounded them up here with links to help you learn how to fight back when auditors attack.

MACs (Medicare Administrative Contractors)

Description: Private companies that contract with CMS to process, pay, and ensure accuracy of Medicare payments.

Habits: May send ADRs (Additional Development Requests) to providers asking to see documentation supporting Medicare claims. Providers have 45 days to respond.

RACs (Recovery Audit Contractors) 

Description: Private companies that contract with CMS to audit all health care companies that submit Medicare claims.

First spotted: In CMS demonstration projects in the mid-2000’s. Contractors and boundaries of regions covered can change yearly.

Habitat: There are four RACs that oversee four regions in the US.

Habits: Feed on the 9-12 percent contingency fees they collect when they hunt down improper payments.

ZPICs (Zone Program Integrity Contractors)

Description: Closely related to RACs, but tasked with sniffing out fraudulent claims, not just improper payments. May refer audits to FBI, DOJ or OIG for further investigation.

Private Payers

Description: Insurers looking for overpayments or fraud. Often equipped with more sophisticated software, analytics, and resources than auditors for Medicare and other federal health care programs.

Increased activity: “Data analytics has exploded over last 10 years,” according to Nicholas Messuri, who heads a fraud prevention and recovery unit for a private payer in Massachusetts. Insurers are mining data in a way no one would have ever dreamed of ten years ago, he said at the American Health Lawyers Association Annual Meeting.

Habits: Perceives a red flag when analytics reveal a provider with outlier billing patterns. Networks with auditors at other private payers to give them a heads up on the outlier and the billing pattern. This efficient interspecies communication delays claims to a provider from all payers. “All of a sudden a provider won’t be getting paid by anybody and won’t understand why,” says Jennifer Ecklund, a health care attorney who also spoke at AHLA. Ecklund sometimes represents providers in litigation that insurers bring against them.

Want to catch coding and billing errors before you land on an auditor’s radar? Read “A Beginner’s Guide to Self Audit’s for Eye Care Practices” here.

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