MAC/RAC Audit Consulting

  • Former Federal Agents
  • 100 Years of Combined Experience
  • Investigations, Compliance & Defense
Chris Quick

Former Special
Agent (FBI & IRS)

Roger Bach

Former Special
Agent (DOJ-OIG & DEA)

Timothy Allen

Former Special Agent
(U.S. Secret Service & DOJ-OIG)

Ray Yuen

Former Special
Agent (FBI)

Michael S. Koslow

Former Special
Agent (DOD & OIG)

Are You Facing a MAC Audit or RAC Audit? Our Former Federal Agents Can Help You Avoid Unnecessary Penalties

Tim Allen

Hospital Consulting Team Lead – Timothy E. Allen | Former Special Agent (U.S. Secret Service & DOJ-OIG)

All healthcare providers that bill Medicare are subject to periodic compliance audits. These audits are conducted by private contractors working with the Centers for Medicare and Medicaid Services (CMS). While CMS works with several types of audit contractors, two of the most-active Medicare administrative contractors (MACs) and recovery audit contractors (RACs). If your facility is facing a MAC audit or RAC audit, you will need to be very careful to avoid unnecessary penalties, and it will be important to engage experienced professionals to help promptly.

At Corporate Investigation Consulting, we have significant experience on both sides of Medicare fraud enforcement matters, including extensive experience consulting with regard to MAC and RAC audits. Our team of experts and consultants is comprised of former federal agents, including former high-ranking agents with the U.S. Department of Health and Human Services Office of Inspector General (DHHS-OIG). As a result of this prior experience, we offer deep insights into how and when CMS, DHHS-OIG, and the U.S. Department of Justice (DOJ) prosecute health care providers for Medicare fraud, and we are able to provide strategic and proactive consulting for MAC and RAC audit defense.

Risks During MAC and RAC Audits

MAC and RAC audits can present significant risks for hospitals and other health care facilities. If auditors determine that your facility has improperly billed Medicare, a MAC or RAC can impose penalties including:

  • Repayment of overbilled claims
  • Recoupments
  • Denial of pending claims
  • Pre-payment review (which can delay payment by as long as six months)
  • Additional financial liability

Crucially, MACs and RACs can also refer cases to CMS, DHHS-OIG, and/or the DOJ. If auditors find reason to suspect that your facility has intentionally overbilled Medicare at any point during the last several years, a MAC or RAC audit could lead to a federal Medicare fraud investigation—and this investigation could potentially lead to criminal prosecution under the False Claims Act and other federal laws.

When auditing Medicare-participating health care facilities, MAC and RAC auditors are seeking to uncover any evidence that the facility may have improperly billed Medicare. MAC and RAC audits can cover several years’ worth of billings under Medicare Part A, Medicare Part B, and other Medicare (and Medicaid) programs. While auditors are supposed to identify underpayments as well as overpayments, since MACs and RACs work with CMS on a “fee for service” basis, these entities are only incentivized to uncover overpaid amounts.

Put our highly experienced team on your side
Roger Bach

Former Special Agent (OIG)

Timothy E. Allen

Former Senior Special Agent U.S. Secret Service

Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Maura Kelley

Former Special Agent (FBI)

Ray Yuen

Former Supervisory Special Agent (FBI)

Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Marquis D. Pickett

Special Agent U.S. Secret Service (ret.)

Defense Strategies for MAC and RAC Audits

While MAC and RAC audits present significant risks, hospitals and other health care facilities can utilize various defense strategies to mitigate these risks during the audit process. When we consult with providers during MAC and RAC audits, we assist with formulating and executing defense strategies including:

Demonstrating Medicare Compliance

When facing a MAC or RAC audit, the ideal scenario is to be able to demonstrate full compliance in order to favorably resolve the audit without liability. For hospitals and other health care facilities that maintain robust Medicare compliance programs – including maintaining ongoing documentation of compliance – this is a very achievable result.

However, this does not mean that achieving this result will be easy. As discussed below, there are several issues that can lead to unjustified demands for recoupments (and other penalties) during MAC and RAC audits. Our experts and consultants can use their experience to clearly demonstrate your facility’s compliance, and we can help guide your facility’s audit toward a no-liability outcome.

Identifying Flaws in Audit Methodology

Despite being devoted to assessing health care providers’ Medicare and Medicaid compliance, MACs and RACs often rely on flawed methodologies. In many cases, they also rely on outdated billing rules and regulations. With our experience in the areas of Medicare and Medicaid compliance, we can identify when MAC and RAC auditors’ methodologies are misguided, and we can assist auditors in using appropriate methods to assess your facility’s billing compliance.

Too often, hospitals and other facilities accept recoupment liability because they are unaware that their audits were flawed. Our former federal agents can help you avoid this mistake, and we can work to favorably resolve your audit so that you do not need to challenge the auditors’ methodologies on appeal.

Challenging Auditors’ Flawed Assumptions

In addition to relying on flawed methodologies, MAC and RAC auditors are prone to making flawed assumptions as well. As a result, even when auditors’ methods are sound, MAC and RAC audits can still lead to unwarranted liability.

With our experience handling MAC and RAC audits, we are familiar with the issues that tend to come up, and we are able to quickly identify additional issues that have the potential to lead to unwarranted liability if left unaddressed. Unfortunately, MACs and RACs tend to err on the side of liability, and it is up to providers to ensure that this approach does not result in excessive penalties.

Challenging Inaccurate Findings

In addition to identifying flaws during the audit process, our experts and consultants are also able to help hospitals and other health care facilities challenge inaccurate findings. If your facility is facing unjustified recoupment demands or other penalties, we can examine the audit and determine what grounds are available to challenge the auditors’ conclusions.

While filing a formal appeal is one option, in many cases it will be possible to challenge a MAC or RAC audit determination informally—as long as you assert your challenge in time. This can be a far more efficient approach, and it is generally best to avoid the appeals process if at all possible.

Negotiating When Necessary

What if your facility’s billing administrators have made mistakes? If your facility has inadvertently overbilled the federal government, then some recoupment liability may be warranted. However, this does not mean that you should simply accept a MAC’s or RAC’s determination. Our experts and consultants can help to ensure an accurate calculation of your facility’s recoupment liability; and, if necessary, we can assist with negotiating for the avoidance or reduction of any additional penalties.

FAQs: Demonstrating Medicare Compliance and Avoiding Penalties During MAC and RAC Audits

Why is My Facility Being Targeted in a MAC or RAC Audit?

MACs and RACs audit all types of Medicare-participating health care providers for billing compliance. If your facility is being targeted, this is most likely the result of random selection or routine administration of auditing protocols—although MACs and RACs do often revisit providers that have been found in violation of the Medicare billing rules and regulations during prior audits.

What are MAC and RAC Auditors’ Qualifications?

Under the CMS guidelines for its “fee for service” audit contractors, all MAC and RAC personnel are supposed to be experts in their respective fields. Unfortunately, this is not always the case—and even experienced and highly-qualified auditors make mistakes. As a result, when facing MAC and RAC audits, hospitals and other facilities cannot assume that the outcomes will be valid. Instead, they must thoroughly scrutinize both the process and the outcome for flawed methodologies, assumptions, and calculations.

Are Mistakes During MAC and RAC Audits Common?

Yes, mistakes during MAC and RAC audits are common. This includes mistakes involving the use of improper methodologies, reliance on outdated billing rules and regulations, misguided assumptions, and faulty calculations. When we consult with providers during MAC and RAC audits, we comprehensively assess all potential faults throughout the process in order to help ensure accurate final determinations.

What Should I Do to Prepare for a MAC or RAC Audit?

If you are aware of an impending MAC or RAC audit (or if you simply want to be prepared for an eventual examination of your facility’s Medicare or Medicaid billing history), there are several steps you can take to prepare. This includes everything from ensuring that all relevant documentation is readily available to coaching your facility’s personnel and conducting an internal billing compliance assessment. Our experts and consultants can assist with your facility’s audit preparation efforts, and we can help ensure that your facility is in the best position possible to successfully defend against a MAC or RAC audit.

Do I Need to Engage a Consulting Firm for a MAC or RAC Audit?

While not strictly required, engaging a consulting firm to assist your facility with avoiding unnecessary liability during a MAC or RAC audit is strongly recommended. There is too much that can go wrong – and too much at risk – to simply allow the audit to run its course. Dealing with a MAC or RAC audit requires time, effort, and a comprehensive understanding of both standard auditing procedures and the current Medicare rules and regulations. Even the largest hospitals typically lack the human capital and resources required to defend against MAC and RAC audits effectively.

Contact Us about Your Facility’s MAC or RAC Audit

Is your facility facing a MAC or RAC audit? Or, is your facility facing substantial recoupment liability (and perhaps other penalties) as a result of a concluded review? If so, we encourage you to contact us promptly. To speak with one of our senior experts or consultants in confidence, please call 866-352-9324 or tell us how we can help online now.

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Contact Team Lead, Timothy Allen,
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Call 866-352-9324 or request an appointment online. We are available 24/7, and our consultants can take action immediately to protect your company.

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