Recovery Audit Contractors (RACs) Subject to “Black-Out” Period

The AMCNO has learned that there may be a black-out period for the RAC in Ohio. This is due to the fact that the current contractual protests of the MAC awards are causing a delay in the Medicare Administrative Contractor (MAC) implementation. If the incumbent claims processing contractor is awarded the MAC contract upon resolution of the protests, there will be no black out period for RAC activity.

If a new contractor is chosen in Ohio (e.g., not the incumbent MAC) and is awarded the MAC contract, a black-out period will go into effect for a period spanning 3 months before and 3 months after the MAC cutover date (the date the claims processing systems actually change from the incumbent to the new contractor). In this 6-month period, the RAC will be prohibited from sending out medical record request letters (for complex reviews) or overpayment demand letters (for automated review) to providers. It is CMS’s contention that this will allow providers to become acclimated to the new MAC and its processes without adding any additional burden (e.g., RAC audits). However, once the black-out period is lifted, a RAC may go back and look at claims processed during that 6-month period. Information to transition to a new MAC has not yet been posted on the PalmettoGBA site due to the protests, but if Ohio does transition to a new MAC the black-out will go into effect. 

This was addressed in a June 2008 publication released by CMS outlining the black-out period for the implementation of the Permanent RAC program To view the publication go to 

http://www.cms.hhs.gov/RAC/Downloads/RAC%20Evaluation%20Report.pdf  under 7. Implementation of the Permanent RAC Program