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

1396a(a)(42). HHSC is required to contract with a RAC for purposes of identifying
underpayments and overpayments in the Texas Medicaid Program.
HHSC may award the contract to a qualified RAC to perform the improper payment recovery
audit(s) and other audit services related to fraud investigations requested by this RFP. During
the term of this contract, the RAC, as an independent contractor, and not as an employee of the
state, shall provide the improper payment recovery audit(s) and other audit services as more
fully set forth below:
RAC shall be proficient in performing improper payment and fraud-related risk
assessments, detecting improper payments and fraud, waste or abuse, utilizing efficient
methods for improper payment and fraud, waste or abuse detection, handling large
volumes of data, understanding control systems and weaknesses, audit report writing, and
project administration and management;
RAC may utilize statistical sampling, regression, digital analysis, data mining, and other
risk assessment or error detection techniques to increase the efficiency of the improper
payment detection process, and fraud, waste or abuse detection. RAC must utilize those
techniques when the RAC believes that the outcome maximizes the overpayments that will
be identified;
RAC shall identify improper payments made in a population of the State’s payments as
determined by HHSC, or as recommended by the RAC and approved by HHSC. The
RAC’s review shall identify improper payments including, but not limited to: (i) duplicate
payments; (ii) pricing errors; (iii) payments for services not provided; (iv) payments for noncovered
services (including services that are not reasonable and necessary under Section
1862(a)(1)(A) of the Social Security Act); or (v) any other errors resulting in improper
payments. Additionally, claims reviewed or under review by the Texas Health & Human
Services Commission’s Office of Inspector General (OIG), or associated with an audit
already underway (i.e. PERM audit, Federal OIG audit or review, CMS audit or review,
CMS contractor audit or review), or other Federal and State audits or reviews shall be
excluded from the population of State payments subject to RAC audits. HHSC may
exclude other types of payments from RAC audits at their sole discretion. The audit
population will only include eligible payments from fiscal years as determined by HHSC,
which may not exceed a three-year maximum claims look-back period from the date the
claim was filed, unless a different time period is authorized by the State.
RAC shall work cooperatively with entities, including, but not limited to those identified
above. The RAC shall also coordinate, in consultation with HHSC, with the
aforementioned entities or other entities, as directed by HHSC. Such coordination efforts
are intended to ensure an efficient and effective process between the review of the
Medicaid providers and the actual audit and identification of improper payments, and
fraud, waste or abuse. The coordination includes keeping HHSC and all stakeholders
apprised of potential areas of vulnerability and avoiding duplication of efforts. Further
clarification regarding the process for communication and coordination between the HHSC
and the RAC, and all outside entities will be defined further in subsequent operating
procedures.
RAC, when performing auditing tasks under a contingency fee payment arrangement,
shall follow applicable professional standards during the course of each audit to ensure
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