RAC Audits - Federal Lawyer

RAC Audits

Legal Advice and Representation for Healthcare Professionals Under Audit

Recovery Audit Contractors (RACs) work with the Centers for Medicare and Medicaid Services (CMS) to identify overpayments from Medicare and pursue recoupments from healthcare providers. RAC audits can have additional consequences as well, and providers that are facing audits must be cautious to mitigate the risks of facing an unfavorable audit determination.

RAC AuditsAs a healthcare provider that participates in Medicare, you expect your Medicare billings to be subject to review. Indeed, this is something that all providers have come to expect over the last couple of decades, as the costs of Medicare fraud have skyrocketed and the federal government has enhanced its efforts to combat Medicare waste and abuse. You have a compliance program in place; but, is it enough? Are you certain that you are compliant with the most-current Medicare billing regulations (and that you have fully complied with prior versions in the past)? Even if you are, will this be enough to prevent an unfavorable determination during a Medicare audit?

Recovery Audit Contractors (RACs) are part of the Centers for Medicare and Medicaid Services’ (CMS) “fee-for-service” recovery audit program. Along with Medicare Administrative Contractors (MACs), Fiscal Intermediaries (FIs), and other private companies, RACs work to uncover fraud and abuse within the Medicare billing system. In order to perform this function, they have been granted certain powers by CMS – powers which include the ability to demand certain information during “audits” of healthcare providers, and to mandate repayment of any amounts that they determine to have been improperly received as a result of false and fraudulent Medicare reimbursement claims.

Under federal law, an improper billing does not have to be intentional in order to lead to liability. RACs can review up to six years of past billing records – revised from three years under the recently-issued final rule for Reporting and Returning of Overpayments. They can seek recoupment of any amounts that they believe – based upon their auditing standards and methodologies – were paid in noncompliance with the Medicare Claims Processing Manual or other applicable standards. Unfortunately, mistakes are common, and providers who fail to adequately protect themselves during the audit process routinely find themselves forced to challenge unfavorable RAC determinations through the protracted audit appeals process.

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden



John W. Sellers
John W. Sellers

Former Senior Trial Attorney
U.S. Department of Justice

Local Counsel

Joanne Fine DeLena
Joanne Fine DeLena

Former Assistant U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney & Former District Attorney

Local Trial & Defense Counsel

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Aaron L. Wiley
Aaron L. Wiley

Former Federal Prosecutor

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (OIG)

Gamal Abdel-Hafiz
Gamal Abdel-Hafiz

Former Supervisory Special Agent (FBI)

Chris Quick
Chris Quick

Former Special Agent (FBI & IRS-CI)

Kevin M. Sheridan
Kevin M. Sheridan

Former Special Agent (FBI)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

Dennis A. Wichern
Dennis A. Wichern

Former Special Agent-in-Charge (DEA)

Healthcare Fraud Defense Lawyers for RAC Audits Providing Services to Client Across the Nation.

Oberheiden, P.C. is a healthcare fraud defense law firm that represents providers across the nation and in RAC audits and appeals and in all sectors of the healthcare industry. Our clients have included physicians, pharmacists, dentists, hospitals, home health agencies, hospices, durable medical equipment (DME) companies, physician syndicates, and company executives – among many others. We have successfully represented clients across the country in invasive RAC audits and related federal investigations. Our former federal healthcare fraud prosecutors offer significant insight into the audit process from the RACs’ perspective (having worked closely with RACs during numerous audits and investigations), and our defense team focuses on executing comprehensive defense strategies focused on closing RAC audits quickly in order to prevent the consequences that can flow from unfavorable audit determinations.

How We Protect Healthcare Providers During RAC Audits

There are several steps we can take to help protect healthcare providers during RAC audits. Our comprehensive approach starts with intervening in the audit process immediately, and reviewing the RAC’s actions to date in order to determine whether any legal violations or substantive errors have accrued. We have a multi-faceted approach to RAC audit defense.

  • We conduct an internal assessment to identify any issues that may surface as a result of the RAC audit.
  • We work to identify safe harbors, statutory exceptions, and specific Medicare billing guidelines that apply to our clients’ billing practices and financial relationships.
  • We work closely with executive leadership and providing training to key personnel regarding appropriate and inappropriate communications with RAC auditors.
  • We take action when RAC auditors exceed the scope of authority granted in their mandate from CMS.
  • We identify and challenge RAC auditors’ flawed methodologies and conclusions, and ensure that selective review of a provider’s Medicare billing records does not lead to a faulty audit determination.
  • We ensure that RAC auditors are applying the appropriate Medicare billing regulations, and not applying outdated regulations to current billings or current regulations to past billings.
  • We preserve issues for appeal in the event of an unfavorable audit determination resulting in recoupments, prepayment review, program exclusion, and/or other penalties.

The sooner we get involved, the more we can do to help. While every case’s facts are different, our goal is to help resolve your audit without an unjustified determination of liability. Our attorneys offer free initial case assessments. Our team of healthcare fraud defense attorneys is available to take responsive action to your RAC audit immediately.

Contact Oberheiden, P.C. online today.

FAQs: Answers from Our Experienced Healthcare Fraud Defense Attorneys

Q: Are RAC auditors qualified to assess the legal propriety of my healthcare company’s Medicare billing records?


In order to help ensure that the outcomes of RAC audits are as accurate as possible, CMS requires all Recovery Audit Contractors to employ personnel who are expected to be experts in various facets of the Medicare billing system. This includes certified coders, nurses, therapists, and a physician contractor medical director (CMD). Unfortunately, mistakes during the RAC audit process remain common, and providers frequently find themselves forced to challenge flawed liability determinations.

Q: What is involved in an RAC audit?


There are three types of RAC audits: automated, semi-automated, and complex. An automated audit does not involve review of the provider’s medical records. However, a semi-automated review may involve manual review of records by RAC personnel, and a complex audit can entail a comprehensive and invasive in-person review that can significantly disrupt your company’s day-to-day operations. Auditors may request to speak with billing personnel and other key employees as well; and, while providers are entitled to information about their audits, the process is often not as transparent as most providers would expect. These are among the numerous reasons why intervention and legal representation are critical, and why all providers need to be prepared to take proactive measures to protect themselves during the audit process.

Once the auditors have completed their review and the required discussion period has passed, the RAC will issue a determination of liability. If the RAC determines that recoupments are owed, the provider must pay quickly (or quickly file an appeal) in order to avoid interest and other penalties.

Q: Who are the RACs?


The Centers for Medicare and Medicaid Services (CMS) awarded the current RAC contracts to the following entities:

  • Region 1 (Northeast) – Performant Recovery, Inc.
  • Region 2 (South and Central States) – Cotiviti, LLC
  • Region 3 (Eastern Seaboard and Southeast) – Cotiviti, LLC
  • Region 4 (West Coast, Midwest, and Northwest) – HMS Federal Solutions
  • Region 5 (Nationwide for Durable Medical Equipment (DME) and Home Health/Hospice (HHH) Services) – Performant Recovery, Inc.

More information about the current RACs is available from CMS: Medicare Fee for Service Recovery Audit Program.

Q: What is meant by the “fee-for-service” audit recovery program?


The “fee-for-service” audit recovery program means that RACs are paid on a contingency-fee basis. In other words, they are financially-incentivized to identify overpayments from Medicare, and they have no direct financial incentive to award underpayments to healthcare providers. During the 2015 fiscal year, RACs collected nearly $360 million in overpayments while awarding just $81 million in underpayments. From 2010 to 2015, RAC audits have resulted in liability of more than $8.9 billion for healthcare providers nationwide.

Q: Can an attorney help prevent an unfavorable RAC audit determination?


Potentially, yes. An attorney who has intimate knowledge of the Medicare billing regulations and who has extensive experience in healthcare fraud defense will be able to identify flaws in RAC auditors’ processes and procedures and challenge inaccurate findings before they are formalized in a final determination. While one option is to let the audit run its course and then file an appeal, the less-risky (and typically less-expensive) option is to take a proactive approach to defending against a RAC audit. The goal to this approach is to avoid the need to rely on the appellate process.

Q: What should I expect if I need to file an appeal?


If you have already received an unfavorable audit determination, or if it is too late to prevent the imposition of recoupment liability by a RAC, you will need to promptly begin preparations to file your appeal. We have covered what healthcare providers need to know about the appeals process in a separate set of Medicare Appeal FAQs.

Q: Can a RAC impose penalties besides recoupment of overbilled claims?


Yes. In addition to demanding recoupments, Recovery Audit Contractors can also deny payment of pending reimbursement claims and initiate prepayment review. These can lead to substantial cash flow issues for providers who rely on regular reimbursements from Medicare. If a RAC finds evidence of healthcare fraud, it can also refer providers to CMS, the U.S. Department of Justice (DOJ), the Office of Inspector General (OIG), and other federal authorities – and these referrals can lead to federal investigations that may ultimately result in civil or criminal charges.

5 Reasons to Choose Oberheiden, P.C.

With your business’s financial stability and Medicare eligibility potentially on the line, you need to take a serious approach to your RAC audit defense. This means hiring seasoned legal representation, and choosing a firm with the experience needed to effectively overcome any RAC auditor mistakes and aggressive use of authority. At Oberheiden, P.C., we offer you representation against these issues and:

1. Government Experience

Several of our attorneys spent decades working in the DOJ, the U.S. Attorney’s Office, and other federal law enforcement agencies prior to entering private practice. We know what RAC auditors are looking for, and we know what it takes to successfully fend off a federal investigation.

2. Results

As a function of our former government lawyer experience, we can quantify our success. Our goal is to resolve our clients’ audits and investigations without excess liability and without the government lodging civil or criminal charges.

3. Recognition

Our senior attorneys hold significant government experience and their exclusive practice focus is on healthcare fraud defense. Managing Partner, Dr. Nick Oberheiden has appeared in television and radio as a contributor in the area of healthcare fraud.

4. Collaborative Approach

Contrary to firms where attorneys work in silos, our attorneys take a collaborative approach that allows each client to benefit from all of our attorneys’ collective government and private practice experience. We do this for our goal that every client receives the very best legal representation we can offer.

5. Hands-On Legal Representation

With our collaborative approach, our client have the opportunity to work directly with our senior attorneys. You will have access to the advice you need when you need it, and we will custom-tailor your RAC audit defense strategy to the specific demands of your business or practice.

Are You Facing An RAC Audit? Contact Oberheiden, P.C. Right Away

Our experienced healthcare fraud defense attorneys and former federal prosecutors are available to speak with you about your RAC audit. We represent healthcare providers in RAC audits and appeals across the county. You can call us 24/7 at 888-680-1745, or request a case assessment online and we will be in touch with you shortly.

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