(RFP) for Recovery Audit Contractor (RAC) - Texas Health and ...

displayed on the Proposed Compensation Tables and Proposed Fixed Fee Rates Schedule
submitted as Attachment A.
The selected RAC will be compensated as described in Section 6 of the RFP and at the final
accepted percentage rate(s) included in the contract which shall not exceed the lower of 12.5%
(or the highest rate paid to Medicare RACs, as published in the Federal Register). Respondents
who submit cost proposals which exceed the maximum contingency fee percentage of 12.5%
(or the highest rate paid to Medicare RACs, as published in the Federal Register) shall be
disqualified from further consideration of any resulting contract. In its separate sealed Cost
Proposal, the bidder should propose a percentage rate(s) (which must not exceed the lower
of 12.5%, or the highest rate paid to Medicare RACs, as published in the Federal
Register) using the pricing matrix provided with this RFP for the contingency fee of
overpayments collected, and underpayments identified based on the three payment
methodologies listed.
The first payment methodology listed in the pricing matrix (Attachment A) takes into
consideration the audit result (overpayment or underpayment) and the level of difficulty
of the review (automated or complex). A review will be considered automated if the
RAC did not need to examine medical documentation to determine the existence of an
improper payment, and it will be considered complex if the RAC did examine medical
documentation to determine the existence of an improper payment.
Based on the audit result and level of difficulty, the appropriate contingency percentage
will be located on the fee table provided by the RAC. This percentage will be applied to
the overpayments recovered or the underpayments discovered and paid to determine
the contingency fee payable by HHSC to the RAC for that specific improper payment
audit.
The second payment methodology listed, “Blended Rate”, is defined as a single
contingency percentage that will be applied to all reviews regardless of the audit result
(overpayment or underpayment) or the level of difficulty of the review (automated or
complex). This percentage will be applied to the total overpayments recovered and the
underpayments discovered and paid to determine the contingency fee payable by HHSC
to the RAC for all applicable improper payment audits.
The third payment methodology, “Tiered”, provides numerous possible contingency
percentages that each take into consideration a specific audit result (overpayment or
underpayment), level of difficulty of the review (automated or complex), and the dollar
value of the recovery audit under review. Based on these three variables, the
appropriate contingency percentage will be located on the fee table provided by the
RAC. This percentage will be applied to the overpayments recovered or the
underpayments discovered and paid to determine the contingency fee payable by HHSC
to the RAC for that specific improper payment audit.
Respondents are to use their business expertise in pricing the work described in this RFP,
taking into consideration any intervening steps or activities that must be performed in order to
complete the work, and offer their rates accordingly, even if HHSC does not explicitly identify
those intervening costs in this RFP. No separate travel expenses or any other type of expenses
will be paid under the contract to result from this RFP.
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