Three Biggest Ways Medicaid RACs Will Affect Hospitals in 2012

While it seems as though the Medicaid Recovery Audit Contractor program has been discussed for ages, it will finally go into effect starting Jan. 1, 2012. The Medicaid RAC program is based off the Medicare version and is expected to save taxpayers $2.1 billion over the next five years, according to estimates from the Department of Health and Human Services.

Hospitals currently deal with Medicare RACs, which collected $797.4 million in overpayments from providers in fiscal year 2011, but a Medicare RAC and a Medicaid RAC are two different animals. Medicaid RACs will also affect a whole new population of hospitals — notably children's hospitals and hospitals that don't treat a high volume of Medicare patients. Here are three things hospitals need to be aware of as Medicaid RACs gear up for their first calendar year.