What does RAC stand for in the context of auditing?

In the context of auditing, RAC stands for Recovery Audit Contractor. Recovery Audit Contractors are entities specifically mandated by the Centers for Medicare & Medicaid Services (CMS) to review and audit claims submitted to Medicare. The primary objective of RACs is to identify and recover improper payments, whether they are underpayments or overpayments, made to healthcare providers. By doing so, RACs help ensure the integrity of the Medicare program and promote the accurate billing of services.

RACs utilize a systematic approach to analyze claim data and identify patterns that may suggest overbilling or other discrepancies. Their findings can lead to financial recoveries for Medicare and can also prompt healthcare providers to adjust their billing practices to avoid future issues. This role is crucial for maintaining compliance and ensuring that healthcare providers are reimbursed accurately for the services rendered.