SECTION 354.1451. Medicaid Recovery Audit Contractor Program

(a) Purpose. The Medicaid Recovery Audit Contractor (RAC) Program is established under §1902(a)(42)(B) of the Social Security Act (42 U.S.C. 1396a (a)(42)(B)) to review and identify underpayments and overpayments, and to recoup overpayments for items or services defined under the Medicaid State Plan or a waiver of the Medicaid State Plan.

(b) Definitions. The following words and terms, when used in this section, have the following meanings unless the context clearly indicates otherwise:

(1) HHSC--The Texas Health and Human Services Commission, the state Medicaid agency.

(2) HHS agency--One of the following health and human services agencies:

(A) Department of Aging and Disability Services (DADS).

(B) Department of Assistive and Rehabilitative Services (DARS).

(C) Department of Family and Protective Services (DFPS).

(D) Department of State Health Services (DSHS).

(3) Improper payment--An overpayment or an underpayment.

(4) Overpayment--An amount paid by HHSC or an HHS agency to a provider that is in excess of the amount that is allowable for services furnished under §1902 of the Social Security Act and its implementing regulations and policies, as defined by the Centers for Medicare & Medicaid Services (CMS), and that is required to be refunded under §1903 of the Social Security Act.

(5) Recovery audit contractor (RAC)--An eligible company or consultant contracted with HHSC to perform recovery audit services.

(6) Underpayment--An amount paid by HHSC or an HHS agency to a provider at a lesser amount due and payable for items or services furnished under §1902 of the Social Security Act and its implementing regulations and policies, as defined by CMS.

(c) Scope of audits.

(1) A RAC will review Medicaid claims submitted to HHSC by Medicaid providers for which payment has been made for any item or service defined under the Medicaid State Plan or a waiver of the Medicaid State Plan.

(2) The RAC will analyze Medicaid paid claims data to determine if services were provided based on federal and state policies and procedures in effect on the adjudication date for the claim date of service. The analysis includes review of medical documentation to determine if services were medically necessary.

(3) In conducting its audit review, the RAC will exclude claims reviewed or under review by the HHSC Office of Inspector General (OIG), or associated with any other audit already underway or completed, including other federal and state audits or reviews.

(4) The RAC will make referrals of suspected fraud and/or abuse, as defined in 42 CFR §455.2, to HHSC OIG. Any enforcement action by HHSC OIG will be conducted under Chapter 371, Subchapter G, of this title (relating to Legal Action Relating to Providers of Medical Assistance).

(d) Audit procedures.

(1) A RAC will provide notification in writing to providers of:

(A) audit policies and procedures;

(B) requests for medical documentation for selected claims;

(C) results of the audit review (underpayment, overpayment, or no findings), unless fraud is suspected; and

(D) the dispute resolution and appeals process.

(2) The RAC will accept medical documentation from providers via mail; electronic submission on CD, DVD, or other method of electronic submission allowed by the RAC; or by fax. All transmissions of documentation must be protected in such a manner to comply with the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and in a manner that is safe and secure.

(3) To identify improper payments, the RAC will review medical charts and documentation including:

(A) duplicate payments;

(B) pricing errors;

(C) payments for services not provided;

(D) payments for non-covered services; or

(E) any other errors resulting in improper payments.

(4) HHSC will recoup identified overpayments from providers and will refund identified underpayments to providers as a result of the audit review.

(e) Notice. A RAC will provide written notification to providers of the following during the course of the audit:

(1) audit review information (for example, audit name, audit description);

(2) potential improper payment;

(3) detailed reason for the potential improper payment; and

(4) appeal rights.

(f) Provider appeals. A provider has a right to appeal any adverse RAC determination using the following processes, as applicable:

(1) HHSC paid claims. For Medicaid claims processed and paid through the Texas Medicaid claims administrator on behalf of HHSC, the appeal will be processed through the Medicaid Program Appeals Procedures process under §354.2217 of this chapter (relating to Provider Appeals and Reviews).

(2) HHS agency paid claims. For Medicaid claims adjudicated by the Texas Medicaid claims administrator and paid by an HHS agency, or adjudicated and paid by an HHS agency, the appeals process for that HHS agency will be followed.

Source Note: The provisions of this §354.1451 adopted to be effective July 12, 2012, 37 TexReg 5114