News, Payment/economy, Skilled Nursing Facility

Judge blocks new RAC contracts

The controversy around Medicare’s Recovery Audit Contractor program continues; a judge has ruled that the government cannot award new RAC contracts until disputed payment terms are resolved.

Long-term care providers have been watching the RAC contract process because current audits have been largely put on hold. CMS has indicated that the awarding of new contracts is one of the steps toward re-starting audits, which providers have protested are too aggressive and have led to a huge backlog of appeals. Citing the continued delay in awarding new Recovery Auditor contracts, CMS restarted some reviews in August.

CGI Federal, a current RAC, stated discontent with the program with its Aug. 27 court filing. CGI’s complaint is that it would take three to 10 times as long for auditors to receive payments under provisions of the current contract requisitions, according to its filing with the U.S. Court of Federal Claims. Federal contracts are supposed to reflect standard commercial practice, as part of the effort to encourage private companies to work with public entities. Judge Mary Ellen Coster Williams granted the ruling on Tuesday, ordering that new contracts cannot be awarded until CGI’s challenge goes through the full legal process. This typically would take nine to 11 months, but CGI will request expedited consideration.