CMS Awards DME, Home Health & Hospice RAC to Connolly, LLC - McDermott+Consulting

CMS Awards DME, Home Health & Hospice RAC to Connolly, LLC

In 2013, CMS announced that the jurisdictions of the RACs would be changed. In January 2014, CMS announced its plans to contract with four regional RACs responsible for the review of Part A and Part B claims and a single national RAC responsible for review of Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DME) and Home Health and Hospice (HH&H) claims.

As we all know, Congress created the Recovery Audit Program to provide an additional level of claims review in order to improve the Centers for Medicare and Medicaid Services’ (CMS) ability to detect fraudulent and/or abusive claims. CMS claims that the Recovery Audit Contractors (RACs) have recovered nearly $9 billion of inappropriate payments since 2009. CMS also claims that a recent internal audit shows a greater than 96% accuracy rate for RAC reviews.

In 2013, CMS announced that, along with the re-competition of the RACs, the jurisdictions of the RACs would be changed. In January 2014, CMS announced its plans to contract with four regional RACs responsible for the review of Part A and Part B claims and a single national RAC responsible for review of Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DME) and Home Health and Hospice (HH&H) claims.

On December 30, CMS announced that it awarded the contract for the DME/HH&H RAC to Connolly, LLC. Connolly has held a RAC contract since the inception of the RAC program and currently serves as the Region C Parts A&B RAC prime contractor.

By dedicating the resources of a single national DME/HH&H RAC, CMS sends a strong signal of its intention to increase review of these types of claims. While it is unclear precisely which types of DME claims will be subjected to review, diabetes testing supplies have long been a concern to both CMS and the Office of Inspector General. It is reasonable to assume that suppliers may see an increase in RAC activity over the next several months.

The CMS announcement is available on CMS’ Recovery Audit Program webpage here.