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

Underpayment amounts shall only be on this report if the identified
underpayments have been paid to the provider by HHSC (in summary and detail);
c. The net recovery amount (overpayments minus underpayments) must be itemized on
each monthly bill. It was the intention of the federal government and HHSC that the
contingency fee amount not be greater than the revenue generated from such reviews;
therefore, the majority of the work shall be geared toward the identification and recovery
of overpayments;
d. Total amount of payments received by the RAC contractor from HHSC since the
previous invoice;
e. Net amount due the RAC contractor as of the date of the invoice; and,
f. The selected RAC will not receive reimbursement for overpayments identified, only on
amounts actually collected from the Medicaid providers. The collection process can be
delayed based on provider appeals. Predicated on HHSC’s past experience, the appeal
process normally takes between four to six months. HHSC’s decision on any provider
appeal is the final decision and the case will be considered closed. Additionally, there is
no further avenue for the RAC to appeal the final decision made by HHSC.
6.3.1 Contingency Fees
The RAC shall be paid a percentage of the actual overpayment recoveries by HHSC, in addition
to an underpayment contingency or fixed fee, based on amounts actually paid by HHSC to the
providers during each preceding month. Actual recoveries are the overpayment amounts
refunded to HHSC by the providers, whether by check or through a debit adjustment to their
Medicaid reimbursement. If the provider is refunding the overpayment in installments, the RAC
fee will be based on the actual amounts paid as they are received by HHSC. The RAC
payments will only be based on a contingency fee payment for overpayment amounts recovered
plus contingency or fixed fees on underpayments discovered that are paid to the providers, not
on overpayments or underpayments identified.
In its separate sealed Cost Proposal (see Section 3.15.10), the RAC should propose
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 (Attachment A) for the contingency fee of overpayments collected, and underpayments
discovered that are paid to the providers based on the three payment methodologies listed
below.
The first payment methodology listed in the pricing matrix 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
50