The Centers for Medicare & Medicaid Services (CMS) has launched the Recovery Audit Contractor (RAC) program to detect and correct improper payments in the Medicare FFS program. According to CMS, the RAC program was designed to determine whether the use of RACs will be a cost-effective means of adding resources to ensure correct payments are being made to providers and suppliers and, therefore, protect the Medicare Trust Fund.

A pilot of the program operated in New York, Massachusetts, Florida, South Carolina and California, and concluded in March 2008. According to CMS, by 2010 it plans to have 4 RACs in place. Each RAC will be responsible for identifying overpayment and underpayments in approximately one-quarter of the country. The new RAC jurisdictions match the DME MAC jurisdictions.

The American Medical Association (AMA) recently provided testimony to the House Small Business Subcommittee on Regulations, Health Care and Trade at a hearing entitled "The Impact on Regulations and Programs on Small Health Care Providers." The AMA representative cited the organization’s opposition to the RAC program, explaining it is burdensome to affected physicians and stating there is no component to educate physicians about common billing mistakes. The AMA also offered several suggestions for improving the program, and also raised the issue of the upcoming transition to ICD-10 codes and how this will factor into the RAC program.

Log on to and learn more about the RAC program. Sleep medicine specialists may be affected by this program, and the AASM will provide updates on the program’s implementation as it becomes available.