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Demand Letter Responsibility to Shift from RACs to MACs

James Carroll, for HealthLeaders Media, August 17, 2011

Recovery audit contractors, previously responsible for issuing demand letters to providers, will shift this responsibility to Medicare administrative contractors. The move reflects the program's desire to increase consistency and efficiency through automation, according to the Centers for Medicare & Medicaid Services.

The RACs will continue to handle this responsibility until January 3, 2012, when the responsibility officially switches over to the MACs. As a result, when a recovery auditor finds that improper payments have made been, it will submit claim adjustments to the MAC, and the MAC will then establish receivables and issue automated demand letters for any recovery auditor identified overpayment.

The MACs will then follow the same process used to recover any other payment, according to the accompanying MLN Matters article.

So how exactly will this affect providers, if at all? According to Kimberly Anderwood Hoy, JD, CPC,director of Medicare and compliance for HCPro, Inc, it should help.

"Many providers face timing difficulties when it comes to demand letters and actual recoupments," she says. "That will be consolidated at the MAC level and thus eliminate the confusion of MAC and RAC coordination."

 "It should help providers have more consistency with the process of recoupment and ease the process of anticipating dates of recoupment," she added.

On the other side of things, the transition of responsibility from RAC to MAC raises some concerns for larger facilities, according to Rachel Williams, RHIT,audit contractor coordinatorat Indiana University Health in Indianapolis.

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