September 18, 2024

Resources and Practical Response Tips

Maynard Nexsen

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Maynard Nexsen

After a lengthy absence, the South Carolina Department of Health and Human Services (“SCDHHS”) announced on September 10, 2024, that its Medicaid Recovery Audit Contractor (“RAC”) program was resuming on October 1, 2024.^[i] SCDHHS awarded the Medicaid RAC contract to Health Management Services (“HMS”), a recovery audit contractor, which will conduct place of service reviews, diagnosis-related group claim reviews, and payment analytics reviews.^[ii] HMS will also be conducting Medicaid Credit Balance Audits.^[iii]

The stated purpose of the RAC program is to assist states in identifying and recovering overpayments, which might be caused by billing and coding errors, failure to coordinate benefits, overutilization, or fraud and abuse.^[iv] Providers are required to pay back overpayments identified, but will also have full appeal rights to challenge alleged overpayments.

SC Medicaid RAC Resources. SCDHHS has a series of readily available resources, including the following:

Place of Service (“POS”) Solution and Review Process	Verifies POS was consistent with patient’s condition, care and services were provided, and validates that clinical documentation supports the level of care
Provider Outreach and Education	Overview of Payment Analytics Audit Process
POS Review Information Sheet	Overview of POS Audit Process
DRG Validation Review Sheet	Overview of Clinical Audit and Review Concept
DRG Clinical Audit and Review Process	Overview of Clinical Audit and Review Process
HMS Credit Balance Audit	Overview of how Credit Balances are determined and audited
FAQ and Contact Info

^{Links to all the above resources are available on the SCDHHS website.[v]}

Practical Response Tips to Prepare for Medicaid RAC Audits. As RAC audits resume, a few simple steps can help ensure an orderly and effective RAC response process.

Conduct internal review of Medicaid RAC targets	Learn if you have vulnerabilities that can be fixed through internal education
Review process for receiving audit requests	Make sure SC Medicaid has your updated address Make sure individuals receiving mail forward audit / medical record requests in timely manner to appropriate person
Designate appropriate person to review all incoming audit requests	Make sure individual receiving requests has education and authority to assess incoming audits from various payors, including SCDHHS
Calendar and meet all deadlines	Avoid automatically imposed overpayments
Review process for producing records and information	Produce complete records to avoid overpayments based on lack of documentation
Build an Audit Response Team	Ensure you have the right team to assess and handle large and small audits

In summary, with the South Carolina Medicaid RAC Program resuming on October 1, the best advice is to know who the RAC is, what the RAC is auditing, and how you anticipate responding to new SC HMS RAC requests.

^{[i] https://www.scdhhs.gov/communications/south-carolina-recovery-audit-contractor-0#:~:text=The%20purpose%20of%20the%20RAC,services%20or%20fraud%20or%20abuse.}
^{[ii] Id.}
^{[iii] https://www.scdhhs.gov/sites/default/files/HMS%20Credit%20Balance%20Audit%20Medicaid%20Overview%20-%20Updated%2005122021.pdf}
^{[iv] Id.}
^{[v] https://www.scdhhs.gov/medicaid-recovery-audit-contractor}

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.