The purpose of this JBC bill is too establish a structured, regulated process for auditing Medicaid providers in Colorado by allowing the Department of Health Care Policy and Financing (HCPF) to contract with Recovery Audit Contractor (RAC) vendors under clear rules and protections.
RAC Contracting Authority
Authorizes HCPF to hire private RAC vendors to audit Medicaid providers.
RACs will review Medicaid claims to identify improper payments or overpayments.
Limits on Audit Time Frame
RAC audits can only review claims that are:
Within 3 years after the expiration of the timely filing period (the normal time allowed for providers to file claims).
Claims older than this can only be reviewed if required by a federal audit.
Limits on Audit Frequency and Record Requests
A provider can only be audited a limited number of times per year.
Audits are restricted in terms of:
How many medical records the RAC can request at one time.
Reduces administrative burden on providers.
Preliminary Findings and Provider Rights
If a RAC audit identifies preliminary overpayment findings, the state must:
Send the provider a detailed report explaining:
Findings
Reasoning
Overpayment calculation method
Providers who undergo a complex audit may:
Request an exit conference to discuss findings before moving forward.
Attempt to resolve concerns informally before initiating a formal appeals process.
Appeals Process Changes
Before filing a formal appeal, providers must first go through an informal reconsideration based on the preliminary findings.
Budget Adjustments
Moves approximately $20.9 million in Medicaid-related appropriations:
Decreases the regular recoveries and recoupments line item.
Increases funding into a new Recovery Audit Contractor Recoveries Cash Fund.
Overall Effect
Creates a regulated audit system with more provider protections and due process.
Aims to recover improper Medicaid payments while ensuring audits are fair, transparent, and limited in scope and burden.
Adjusts budget accounts to properly reflect how RAC recoveries are managed financially.
Summary
Joint Budget Committee. The bill allows the department of health
care policy and financing (state department) to contract with a recovery audit contractor (RAC) vendor to conduct RAC audits of medicaid providers (providers) on behalf of the state department.
RAC audits may only review claims that are no more than 3 years past the date of the expiration of the timely filing period. The bill allows the state department to review claims that fall outside of this 3-year time frame only if required by a federal audit.
The bill limits the number of audits a provider may undergo each
year and limits the number of medical records that can be requested for a given audit.
If the state department identifies preliminary findings during the
RAC audit, the state department must send the provider a report detailing the preliminary findings, the rationale for the preliminary findings, and the methodology for how any overpayments were calculated and determined.
The bill allows a provider that received preliminary findings
following a complex audit to request an exit conference to discuss the preliminary findings with the state department in an effort to resolve the concerns detailed in the preliminary findings prior to undergoing an informal reconsideration of the preliminary findings.
The bill requires a provider to participate in an informal
reconsideration before filing a formal appeal regarding the state department's findings during a RAC audit.
The bill, in the department of health care policy and financing for
medical and long-term care services for medical-eligible individuals budget, decreases the cash funds appropriation from recoveries and recoupments by $20,900,588 and the cash funds appropriation from the recovery audit contractor recoveries cash fund is increased by $20,900,588.
