Nothing may be worse than getting a letter from a contract auditor requesting medical records. And trying to determine which state or federal agency or contractors are making the request can be equally frustrating.

Yet, preparing for a Recovery Audit Contractor (RAC) “visit” will make receiving an audit letter less stressful.

The Centers for Medicare & Medicaid Services initiated audits by state government-sanctioned private-sector contractors in 2005. The aim was to identify and correct overpayments and underpayments to health care professionals caring for Medicare beneficiaries. The three-year pilot program was limited to three states. Its success, however, (close to $1 billion in “recovered” dollars) ensured the RAC program’s expansion, first nationally in 2008 and more recently, to Medicaid and, hence, pediatrics via the Affordable Care Act (ACA).

Participating state Medicaid agencies contract auditors on a contingency basis at a rate not to exceed 20 cents for every dollar recovered. The...

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