Jackson Davis HealthCare
Medicare RAC Audit Appeals,
   RAC Audit Defense & RAC Shadow Audits
(303) 586-5003

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The Healthcare Provider's #1 Medicare Audit Defense & Medicare Appeals Team
RAC Audit Defense - RAC Appeals - RAC Shadow Audits

Medicare RAC Auditors Expand Coding, MS-DRG assurance and Medical Necessity Reviews.  CMS Targets Providers Nationwide With Expanded Medicare Recovery Audits (RAC Audits)

What is a "RAC" audit and why should I care?  How is a RAC audit different than any other audit by CMS?  How does the RAC appeals process work?  How can I avoid being audited in the first place?....

Over the past decade, CMS (the Centers for Medicare & Medicaid Services) has ramped up efforts to guarantee the taxpayer that healthcare providers are solely paid for services rendered that (1) meet requirements as originally established within the Social Security Act and subsequent regulations, (2) meet Medicare provider contractual obligations (Conditions of Participation) and (3) meet Medicare coverage criteria
. CMS spent 30 years collecting and analyzing outcomes data from internal audit programs (CERT, HPMP, QIO, etc.) and both Congress and CMS have committed unprecedented resources to enforce evidence-based coverage policies and stop Medicare fraud.  After a 3-year demonstration project in selected states across the nation, CMS sold congress on implementing and expanding Medicare Recovery Audits (or "RAC audits") nationwide.

In an effort to move-the-bar and collect on perceived overpayments to providers, the Centers for Medicare and Medicare Services (CMS) is taking aggressive strides to accelerate the acceptance of evidence-based health care and lighten the load of a strained national budget.  The modern Medicare auditing effort is both far reaching and technologically advanced.  Coordinated efforts of law enforcement, Medicare Recovery Auditors (RAC Audits), Medicare Administrative Contractors (MAC audits), Zone Program Integrity Contractors (ZPIC Audits), Medicaid Integrity Contractors (MIC audits) and a host of others are designed to crack down and eliminate fraud & abuse.

CMS is investing hundreds of millions of dollars in dozens of separate – but coordinated – enforcement efforts to force providers to adhere to Medicare rules & regulations.  The target?  Everyone.  In addition to now having thousands of contracted individual Medicare auditors under the CMS umbrella, the government is utilizing leading-edge database technology and integrated business logic to assist in the day-to-day review of millions of electronic Medicare claims for payment.  Providers can no longer fly under the radar of the Medicare audit process.  If you submit electronic claims for payment, you are instantly being “audited” for the services rendered.

The problem?  The vast majority of healthcare providers are good people that obey the law and make every effort to adhere to multiple layers of conflicting and seemingly arbitrary Medicare coverage criteria for payment.  While for-profit, Medicare audit contractors are building businesses and selling out to the highest bidder, providers a caught in a giant web of never-ending Medicare audits of their services. Hospitals, physicians, home health agencies, hospices, DME suppliers, inpatient rehab facilities, physical therapists.... all are facing daily challenges of operating under enormous governmental scrutiny and overwhelming paperwork requirements.

Now, more than ever, Medicare contractors are applying subjective opinions and inaccurate criteria in order to insure preconceived outcomes.  Great providers are being bankrupted and 10,000s of people are losing their jobs to unscrupulous CMS auditors that are just trying to make a buck and increase their company's stock price.

In addition to the highly touted and widely publicized RAC Audits - Medicare ZPIC audits, OIG audits, DOJ audits, Medicaid Integrity Contractor audits and the Medicare One PI system are all just samples of the latest initiatives focused on provider payments.  However, CMS is adopting Medicare recovery audits (or RAC audits) as the first real tangible effort to push hospitals, physicians and other healthcare providers down a path of revolutionizing the clinical practice of medicine.  Using a classic "carrot and stick" approach, CMS has combined clinical pay-for-performance (P4P) incentives and value-based purchasing initiatives (the carrot) with the strong arm of RAC medical collection agencies (the stick) to insure providers are doing their part to facilitate a more nationalized, evidence-based healthcare structure.

Medicare RAC Audit Program Overview & Recent Updates

Dynamic and ever-changing, Medicare audits, Medicare appeals and the Medicare recoupment process are all moving targets.  The following are some recent updates from CMS regarding the Medicare RAC audit program: 

            RAC Audit Program Overview
            RAC Audit Outcomes Newsletter - Q2 2013
            RAC Audit Outcomes Newsletter - Q1 2013
            RAC Audit Outcomes Newsletter - Q4 2012
            RAC Audit Program Report To Congress (2011)
            2013 RAC Audit Program Prepayment Demonstration
            OIG Report on RAC Auditor Oversight By CMS (August, 2013)
            RAC Auditor Contact Information

Region A: Performant Recovery
States: CT, DE, DC, ME, MD, MA, NH, NJ, NY, PA, RI and VT.

Region B: CGI
States: IL, IN, KY, MI, MN, OH and WI.

Region C: Connolly, Inc.
States: AL, AR, CO, FL, GA, LA, MS, NM, NC, OK, SC, TN, TX, VA, WV, Puerto Rico and U.S. Virgin Islands.

Region D: HealthDataInsights
States: AK, AZ, CA, HI, ID, IA, KS, MO, MT, ND, NE, NV, OR, SD, UT, WA, WY, Guam, American Samoa and Northern Marianas.


How Can Jackson Davis Help?

As your unwavering advocate, Jackson Davis HealthCare (JDH) leads the nation in assisting healthcare providers facing Medicare compliance challenges.  For over 25 years,
Jackson Davis HealthCare professionals have dedicated every day to understanding, documenting, synthesizing and applying Medicare Coverage Criteria for cases being considered for Medicare audits and Medicare appeals - RAC appeals, ZPIC appeals, DOJ appeals, MAC appeals, MIC appeals or individual Medicare beneficiary appeals.

Medicare Appeals / Medicare Shadow Audits - Over the past 25 years, Jackson Davis professionals have worked with providers nationwide to appeal 1,000s of Medicare overpayment issues and win 9 out of 10 cases.  
JDH partners with providers to analyze, develop & build winning Medicare appeals cases.  Our board-certified physicians, legal nurse auditors and industry-leading compliance staff are unmatched in Medicare audit defense and the submission of winning Medicare appeals.  Simply put, NO ONE will give you a better chance to succeed at your Medicare appeals.

2014 Medicare Self-Audit Templates - Are you looking to build a rock-solid internal audit & compliance program using Medicare coverage criteria as a foundation?  Have you been conditionally denied payment from a Medicare contractor and want to build winning appeals?  The 2014 Medicare self-audit templates are perfect for use by internal auditors and compliance professionals when reviewing potential Medicare focus areas and building winning Medicare appeals.  These detailed, self-audit templates are now available for purchase by healthcare providers nationwide.

Mock Medicare Program Integrity Audits (Mock PI Audits) - Jackson Davis HealthCare assists providers in completing proactive, medical records audits versus Medicare coverage criteria - Medicare Program Integrity audits (or "Mock" PI Audits).  Each Medicare PI audit is based on documented, CMS payment criteria and Medicare coverage criteria for selected focus areas and may include a sampling of 10 - 500 patient encounters.  Each encounter is pre-screened and carefully selected based upon Medicare current or anticipated audit focus areas.

Medicare "Additional Documentation Request" Response (RAC auditor ADR response) - A provider's initial ADR response is a critical stage of the Medicare audit process.  Jackson Davis professionals are experts at developing a cohesive and winning approach to responding to RAC auditor requests for documentation.  NO ONE will give you a better chance to address and eliminate additional Medicare audit threats.

Internal Audit & Medicare Physician Advisor Program Development - Are you looking for a helping hand in developing or revamping your internal audit or Medicare physician advisor programs?  Are you looking for a reliable resource to work as a true partner in the process of adopting a more structured foundation built on Medicare coverage criteria?  Are you uncomfortable about facing prepay audits or want peer review of your external physician advisor group?  Jackson Davis is the solution. Our board-certified physicians really do understand Medicare coverage criteria and they work closely with our legal nurses and regulatory team to bring compliant solutions to providers everyday.

CMS Compliance Advisory Services - Providers nationwide retain JDH for monthly audits, compliance advice or on a project-by-project basis.  Our staff is highly experienced and our knowledge and application of Medicare rules and regulations is unmatched in the industry.  We are true Medicare compliance geeks.  From our physicians to our nurses to our compliance research team, we are in your corner and available 24/7 for your CMS compliance needs.  Call us today for help with any medicare appeal issue - hospital appeals, snf appeals, home health appeals, physician appeals, hospice appeals and DME supplier appeals.

Medicare Audits & Medicare Appeals - Webcasts / Events - FY 2014 Winter / Spring Events

Join our industry-leading Medicare audit defense team and Medicare coverage criteria professionals for the nation's best Medicare audits and Medicare appeals webcasts!  Call or e-mail us today for registration at support@jdhcare.com or (303) 586-5003.

February 18, 2014 - 2:00p - 3:00p EST *** SPECIAL EVENT ***
ALJ Hearings - Update, Scheduling, Recoupment & Next Steps

The fallout continues....  It was inevitable...  ALJs are overloaded and the Office of Medicare Hearings & Appeals has suspended the assignment of ALJ hearing dates for the next 2 years!  65 ALJs and over 357,000 pending appeals - what did CMS think would happen?  CMS has 1,000s of contracted auditors pounding providers across-the-nation.  CMS has contracted with for-profit audit companies with every possible incentive to deny payment.  CMS has recoupment rules that clearly and unequivocally deny due process to providers.  We've got a national budget that can't possibly pay all the bills.  In short, we've got a train-wreck.  This detailed presentation will address the ALJ hearing suspension, recoupment concerns, strategies for moving forward and a recap of the recent OMHA Medicare Appellant Forum discussion.

This is a SPECIAL EVENT presentation and the cost will be $125 per provider (versus $195).  Please send your registration request and contact information to us via e-mail at
support@jdhcare.com.  Registrations and payment must be received no later than February 14 and you will receive an e-mail confirmation with sign-on information and password.  
The cost is $125 per healthcare provider.

February 25, 2014 - 2:00p - 3:30p EST
The Medicare Appeals Process for Healthcare Providers - How to Win!

This presentation will address issues associated with Medicare audit defense strategies, Medicare appeals and Medicare shadow audits - RAC appeals, ZPIC appeals, DOJ appeals, OIG appeals, MAC appeals, Medicare overpayment determinations and the Medicare appeals process.  Through 2013, Jackson Davis has assisted providers in winning almost 90% of all Medicare appeals... and we will be in your corner!

As CMS continues to ramp up auditing efforts, providers nationwide are spending tens of millions of dollars on legal fees, repaying hundreds of millions of dollars to CMS for conditional denials and being exposed to potential Medicare fraud allegations.  This discussion will provide an in-depth look at the Medicare appeals process and explore a wide range of opportunities for providers to proactively build winning Medicare appeals (RAC appeals, ZPIC appeals, etc.).  The old days of soft regulations and provider education are over - it is absolutely vital that providers understand how the game has changed.

Please send your registration request and contact information to us via e-mail at
support@jdhcare.com.  Registrations must be received no later than February 17 and you will receive an e-mail confirmation with sign-on information and password. 
The cost is $195 per healthcare provider.

March 4, 2014 - 2:00p - 3:30p EST
Medicare Auditor Targeting of Skilled Nursing Facilities (Part A & Part B) - SNF "Medical Necessity", MDS Documentation & Therapy Services

Under fire from Medicare audits, SNFs can be highly susceptible to losses from missing documentation, "medical necessity" requirements, therapy services and challenges relating to appropriately billed MDS components for Medicare Part A and Part B coverage.  This presentation will address a wide range of topics including responding to Additional Documentation Requests from CMS and CMS contractors, applicability of acute stay documentation, developing SNF appeals, performing self-audits and the major target areas where providers struggle to win ZPIC audit cases.

Please send your registration request and contact information to us via e-mail at
support@jdhcare.com.  Registrations must be received no later than march 3 and you will receive an e-mail confirmation with sign-on information and password. The cost is $195 per healthcare provider.

March 18, 2014 - 2:00p - 3:30p EST
Hospice Care - Terminal Illness Certification... How long is too long?

This presentation will address one of the most frustrating and "grossly inappropriate" audit focus areas on the current CMS workplan... provider payments for the certification of terminally ill patients that live longer than 6 months.  Medicare contractors - and ZPIC auditors in particular - have attacked providers who care for terminally ill patients that actually live longer than their diagnosis-driven, average life expectancy of 6 months.  Not only are these Medicare auditors arbitrarily denying cases where patients live longer than average, they are extrapolating the outcomes into the millions of dollars for select hospice providers.

Please send your registration request and contact information to us via e-mail at
support@jdhcare.com.  Registrations must be received no later than March 17 and you will receive an e-mail confirmation with sign-on information and password.  The cost is $195 per healthcare provider.


2014 Medicare Audit Defense & Medicare Appeals - Self-Audit Templates

Medicare self-audit templates and Medicare supporting documentation are now available for purchase by healthcare providers and healthcare attorneys nationwide. These are the perfect solution to proactively preparing for Medicare RAC audits, Medicare ZPIC audits, Medicaid Integrity Contractor audits and a wide range of other CMS audit initiatives!

Jackson Davis HealthCare, the nation's leading resource for Medicare audit defense & Medicare appeals, has invested thousands of hours in the documentation of CMS payment criteria, Medicare coverage criteria & development of Medicare self-audit templates for each RAC audit focus area. These Medicare self-audit templates are backed by over 10,000 CMS and CMS contractor documents and provide the nation's most comprehensive resource for the evaluation of Medicare audit focus areas and the preparation of Medicare appeals.

The Medicare self-audt templates are perfect for use by internal auditors and compliance professionals in proactively reviewing potential RAC audit cases and when considering the filing RAC appeals. The following is a small sample of Medicare self-audit templates that are available for purchase by healthcare providers:

    PCI / ICD / Pacemakers (surgical procedures in wrong setting)
    Major Joint Replacement (orthopedic hips / knees)
    Home Health Agency admissions (homebound status and medical necessity)
    Skilled Nursing Facility admissions
    Short stays (chest pain & chest pain related diagnoses)
    Pneumonia diagnosis code sequencing
    Physician E&M coding
    Hospice admissions (medical necessity)
    Respiratory care with ventilator diagnosis code sequencing
    Inpatient Rehabilitation Facility admissions
    Outpatient physical therapy visits
    Use of modifier 25
    Wound care clinic and procedure billing
    Emergency Room visit criteria and CPT code selection
    HME supplies (billing and medical necessity)
    Excisional Debridement Impacted MS-DRGs
    Extensive O.R. Procedures Unrelated to PDX
    Portable Radiology visits & billing
    Neulasta billing & documentation
    Septicemia diagnosis code sequencing

Single and multi-facility pricing options are available. Contact one of our Medicare audit defense team members or Medicare appeals compliance professionals with any questions and place your order request at (303) 586-5003 or e-mail us directly at


Medicare Recovery Audits - A Brief Historical Chronology (FY 2008 - FY 2010)

August 12, 2010 - After 2 years of delays and contract challenges relating to the Medicare Recovery Audit program, CMS has approved the in-depth "medical necessity" review of multiple evidence-based coverage areas.  Initially, the focus will be on the admission of patients with chest pain and chest pain related diagnoses (primarily MS-DRG 312 and MS-DRG 313).  Jackson Davis has been working with providers nationwide over the past several years to implement Medicare coverage criteria for chest pain cases. 

December 2, 2009 - Connolly HealthCare was approved by CMS to initiate the auditing of 24 new issues this week in Region C.  These issues specific relate to MS-DRG focus areas and claim submission issues.  CRMG has scheduled an education webcast for January 5, 2010 to discuss and review billing and claim submission issues relating to Extensive O.R. Procedures Unrelated to the Primary Diagnosis - MSDRGs 981 - 983.

November 15, 2009 - Hospitals throughout the southeast reportedly started receiving denials this week from Connolly HealthCare relating to a wide range of automated audit issues.

November 12, 2009 
- The Obama administration and CMS started an aggressive rollout of fraud related public relations articles and specifically highlighted outcomes from recent law enforcement investigations.  Based upon the scope and direction of the governmental reports (as well as the imminent adoption of healthcare reform), CRMG expects unprecedented growth in law enforcement activities throughout 2010 aimed at perceived provider fraud & abuse. 

August 3, 2009 
- Today, Connolly Healthcare posted the first list of CMS approved issues relating to automated RAC audits.  Seven CMS payment criteria issues have been initially approved for automated audits in South Carolina and are expected to be quickly approved for the remaining states located in RAC Region C.  Designated the "unlucky 7", this first round of CMS approved RAC issues includes Blood Transfusions, Untimed Codes (most likely Physical Therapy initial and re-evaluation codes), IV Hydration Therapy, Bronchoscopy, once in a lifetime procedures, pediatric procedures and Pegphilgrastim injection codes.

An overview of the initial Medicare RAC audits "Unlucky 7" can be found on the RAC audits section of the 
Connolly Healthcare website.

June 28, 2009 - 
Tim Johnson, Executive Director for the Castle Rock Medical Group, was asked to present a RAC audits & appeals update to the TxHIMA annual convention in Dallas and were joined by Jackson Walker, L.L.P. (one of Texas' leading health law firms). Castle Rock Medical Group and Jackson Walker would like to thank TxHIMA and the Texas hospital representatives for a terrific session and unsurpassed hospitality.

May 1, 2009 - CMS has posted an update to the RAC Audit and RAC Appeals education schedule for the state of Texas.  The Texas Hospital Association (THA), CMS and Connolly Consulting have canceled the "live" sessions and this information is being be made available by THA through their website.

March 19, 2009 - 
CMS has announced the tentative outreach schedule for state-by-state provider RAC audit & RAC appeals education.  This outreach process was mandated as part of the national roll out and is designed to offer additional insight and respond to provider questions relating to the program.

February 6, 2009 - 
The Centers for Medicare & Medicaid Services (CMS) announced the settlement of RAC audit protests by both PRG-Schultz and Viant.  Based upon the settlement, PRG-Schultz and Viant will be retained as sub-contractors to the primary RACs in each region.

Important note to IRF providers and physicians:  PRG-Schultz sub-contracted with Viant during the RAC audits demonstration project and they made a significant impact in challenging Inpatient Rehabilitation Facility (IRF) admissions throughout California ($59.7M in IRF admissions were denied in California). 

February 6, 2009 - 
The Government Accountability Office (GAO) website was updated this morning to show that a resolution and settlement had been reached in conjunction with the RAC contract award protests.  Both protests have been "withdrawn" by PRG-Schultz and Viant - opening the door for the full national RAC audit rollout to commence effective immediately. 

February 1, 2009 - 
The Government Accountability Office (GAO) continues its review of protests filed by PRG Schultz and Viant. Both organizations filed formal protests in connection with the permanent RAC awards and the GAO was required to initiate an automatic 100 day "stay" in the nationwide rollout of the RAC audit process.  CRMG will continue to closely monitor the GAO review of the awards and give providers notice as soon as the GAO decision becomes available.  The GAO decision to both protests is due the week of February 9, 2009.

January 5, 2009 - CMS released updated information on recovery audit appeals activity through August 31, 2008 for the RAC audit demonstration states.  According to CMS, RACs denied 525,000 claims (275,000 Part A and 250,000 Part B claims).  Providers challenged 22.5% of RAC denials and filed 118,000 RAC audit appeals (57,000 Part A appeals and 61,000 Part B appeals).  To date, providers have won approximately 40,000 RAC appeals or 34% of all cases filed for appeal.

November 28, 2008 - 
CMS released revisions to monthly statistical reporting for Medicare appeals activity reflected on form CMS-2592.  Due to the anticipated level of RAC appeals and associated workload, CMS will be tracking separate statistics for RAC appeals versus other Medicare appeals.  Specifically, this will allow CMS to more accurately allocate funds directly for RAC appeals activity.

November 14, 2008 - The December '08 issue of Eli's Research Report was released today and offers an in-depth look at CMS & RAC audit challenges to both inpatient and outpatient physical medicine providers.  Inpatient rehabilitation providers were hit particularly hard during the demonstration project and have been facing intense RAC auditor reviews relating to the meeting of medical necessity criteria and documentation requirements.

November 12, 2008 - CMS held Special Open Door Forums for both Medicare Part A and Part B providers via teleconference to discuss a wide range of issues related to the national rollout of the RAC audits program.  Several CMS professionals weighed-in during the discussion and reiterated previous CMS guidance relating to areas such as the RAC audit process, RAC medical records requests and RAC appeals.

November 4, 2008 - The Centers for Medicare and Medicaid Services (CMS) formally announced the protest of permanent RAC audit contracts by 2 unsuccessful bidders.  PRG-Schultz and Viant both have filed protests with the General Accountability Office (GAO).  With well over $100M in contingency fees at stake, both companies are fighting hard for their piece of the RAC collection agency pie.  While the protests do result in an automatic 100 day reprieve from provider recoupment of overpayments, they do not impact the retroactive nature of the RAC process.  Once finalized, the permanent Medicare recovery audit contractors will be reviewing and denying perceived overpayments back to October 1, 2007.

November 3, 2008 - After establishing and committing to the formal provider RAC audits outreach schedule nationwide, CMS had to cancel all meetings today due to a "protest and stay of performance" relating to the awarding of the permanent RAC contracts.  While details are pending from CMS, this action was taken on behalf of 
PRG-Schultz (who's stock was down 65% since they lost the permanent RAC contract award: PRGX) who was clearly unhappy with a potential loss of over $100M in anticipated contingency fees from the permanent RAC project.  PRG-Schultz gained the ire of providers throughout California during the demonstration project and their lack of participation in the permanent program was applauded by the California Hospital Association.

October 29, 2008 - 
CMS formally established limits for the number of medical record requests by the permanent RACs and outlined the methodology for complex review limitations.  Basically, hospitals, inpatient rehab facilities and skilled nursing providers will be limited to the lower of 200 individual record requests or 10% of the provider's monthly claim volume - per 45 day period.  Physician limitations are based upon the size of the practice and range from 10 to 50 medical records per 45 day period.

October 10, 2008 
- CMS outlined the RAC audit contingency fee agreements for the Medicare Recovery Audit Contractors in each region.  Ranging from 9% - 12.5%, CMS is paying independent RAC fees based upon the collection of perceived overpayments for services with paid claim dates starting October 1, 2007.

October 6, 2008 
CMS announced the 4 permanent RACs today and reaffirmed the immediate, rapid and comprehensive roll out of the Medicare Recovery Audit program nationwide.  The permanent RACs have been initially assigned to 19 states and 4 different regions as the roll out begins nationwide.  The remaining states will be assigned in early 2009 for implementation later next year(however, ALL states are subject to audit for paid claim dates back to October, 2007).

In conjunction with the formal press release and announcement today, 
CMS Acting Director Kerry Weems laid out an aggressive plan to combat perceived "fraud" and aggressively pursue provider recoupment nationwide.  While much more information is anticipated over the next 30 - 60 days regarding the RACs and related contact information, the following permanent RACs are in place:

Region A - Diversified Collection Services, Inc. - Livermore , California 
Maine, New Hampshire, Vermont, Massachusetts, Rhode Island and New York

Region B - CGI Technologies and Solutions, Inc. - Fairfax, Virginia
Michigan, Indiana and Minnesota

Region C - Connolly Consulting Associates, Inc. - Wilton, Connecticut
South Carolina, Florida, Colorado and New Mexico

Region D - HealthDataInsights, Inc. - Las Vegas, Nevada
Montana, Wyoming, North Dakota, South Dakota, Utah and Arizona

October 5, 2008 
- In a press release dated today, PRG-Schultz announced that they received notice from CMS and have not been selected as a permanent RAC audits contractor under the Medicare Recovery Audit program.  PRG-Schultz did receive a RAC audit contract during the demonstration period, but apparently their contingency % bid for the permanent program was too excessive.

September 12, 2008 - CMS released Transmittal 141 today and discussed revisions to the Medicare RAC appeals process and recoupment of perceived overpayments to providers.  In summary, time frames relating to the first 2 steps in the RAC appeals process have not changed (i.e. 120 days to file for redetermination and 180 days to file for reconsideration).  However, in order to stop the automated recoupment of overpayments from RAC audits, providers MUST file within 30 days for redetermination and within 60 days for reconsideration.

September 12, 2008 - CMS Office of Financial Management Director Tim Hill reaffirmed the selection of permanent RAC auditors and a revised time frame for the nationwide roll out at an AHA forum for hospital executives this week.  Mr. Hill confirmed CMS' intention to announce the permanent RACs by October 1 and the initiation of demand letters and medical records request no later than January '09.