RAC Appeals Levels

March 30, 2012 — 1,199 views  
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Healthcare is an enormous industry in the United States, and even what little activity the federal government performs can have huge implications. For instance, the Medicare program is designed to give access to healthcare for people 65 and older. It works through a reimbursement system where medical providers are eventually paid back for the services they provide by the U.S. government.

However, there are many cases of fraud and illegitimate claims put forth. The U.S. government estimates around 3.9 percent of all Medicare claims are not valid, either intentionally or through misunderstanding. The Medicare Modernization Act of 2003 established the Recovery Audit Contractor (RAC) program and set up the process of RAC appeals to help those accused of fraudulent Medicare claims dispute the decision.

There are five levels of RAC appeal that must be met in a particular order. First, an insurance carrier must conduct a redetermination by fiscal intermediary within 120 days. If the claim is still considered invalid, a person or organization can take the dispute to the next level within another 180 days by consulting with a qualified independent contractor. The next step is to attend an administrative law judge hearing within 60 days, followed by a Medicare appeals council review before 60 days have passed. The last RAC appeal level, which also holds the most authority, is a judicial review by a U.S. district court that must be carried out within another 60 days.