Understanding RAC

by  Brandy Brimhall, CPC, CMCO, CCCPC, CPCO, CPMA
November 19th, 2014

Recovery Audit Contractors, also known as RAC, is a program that seeks to identify and correct improper payments for services provided to Medicare Parts A & B beneficiaries. This includes both recoupment of overpayments and corrected distribution of underpayments made by CMS.  

RAC began in 2005 as a three-year demonstration project consisting of a limited number of states where abuse of the Medicare Trust Fund was known to be elevated. Due to overwhelming success in just these few states, the Secretary of Health and Human Services was required to transition this to a permanent program in 2006. 

The duties of a Recovery Audit Contractor (RAC), like in its name, has the purpose of determining what they would consider to be improper payments and recovering those funds from providers.  

Importantly, RACs are paid on a contingency fee which is based on the amount of Medicare reimbursement that is recovered from providers’ “improper” payments. So, while they are paid a contracted rate, given that it is based upon recoupment, RACs are still quite motivated to produce. Note that recovery auditors do employ certified coders, nurses and other qualified personnel.

Recovery Audit Contractors (RAC) are divided into four separate regions.  Please see the following itemization and link to each region:

RAC Regions


Region A:  Performant Recovery


Connecticut, Delaware, D.C., Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont

Region B:  CGI Federal, Inc.


Kentucky, Illinois, Indiana, Michigan, Minnesota, Ohio, Wisconsin

Region C:  Connolly, Inc.


Alabama, Arkansas, Colorado, Florida, Georgia, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia

Region D:  HeatlhDataInsights, Inc


Alaska, Arizona, California, Hawaii, Iowa, Idaho, Kansas, Missouri, Montana, Nebraska, Nevada, North Dakota, Oregon, South Dakota, Utah, Washington, Wyoming, Guam, American Samoa, Northern Marianas

Should you learn that your practice is undergoing a RAC audit, there are helpful steps that can be taken to minimize the strain to your practice. First, being compliant and timely with requests is critically necessary; secondly, learn the appeals process and steps you can take in order to protect your practice; third, consider reaching out to a qualified healthcare attorney with experience with the management of audits. We at ChiroCode are available to provide information and answer questions that you might have.  If you're unsure of an attorney to contact, we can also refer a qualified resource to aid you through the audit processes.  


Understanding RAC. (2014, November 19). Find-A-Code Articles. Retrieved from https://www.findacode.com/articles/understanding-rac-2286.html

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