Recovery Audit Contractor (RAC) Program

What is the RAC program?

Under Section 6411(a) of the Affordable Care Act, each state must contract with a contingency-fee-based vendor to review provider claims. The purpose of the review is to reduce improper Health First Colorado (Colorado's Medicaid program) payments through the efficient detection and collection of overpayments, the identification of underpayments and the implementation of actions that will prevent future improper payments. See also CRS Section 25.5-4-301 and 10 CCR 2505-10, Sections 8.050 and 8.076.

In November 2009, President Barack Obama signed Executive Order 13520 which aimed at reducing improper payments by increasing transparency in government and holding agencies accountable for reducing improper payments. A year later, Section 6411 of the Affordable Care Act was enacted, directing each state Medicaid program to establish a program in which it contracts with 1 or more recovery audit contractors for the purpose of identifying underpayments and overpayments and recouping overpayments. Learn more about the final rules established for the RAC program.

Who is the Department's RAC Contractor?

In 2021, the Department awarded Health Management Systems, Inc., (HMS) the contract to act as its Recovery Audit Contractor (RAC).

HMS serves as a RAC vendor in several other states around the nation. In addition, the Department is currently contracted with HMS to conduct third-party liability reviews to determine if another party is legally responsible for claims payment. 

For more information on Health Management Services, Inc. (HMS) and RAC related resources for providers please go to:
https://resources.hms.com/state/colorado/rac

RAC Audit Scope

The purpose of the RAC is to reduce improper payments while also presenting billing education opportunities to providers to improve the accuracy of claims submitted to the Department for reimbursement. Under the RAC, all provider types will be audited. The RAC vendor will audit the following types of claims: Health First Colorado fee-for-service, waiver services, managed care, and Child Health Plan Plus (CHP+) claims.

The RAC lookback period is seven years (84 months) from the Paid Date of the Health First Colorado claim. For more information on the lookback period and State Program rules, see the State Plan Amendment CO-16-003.

HMS will conduct post-payment claims reviews of provider-submitted Health First Colorado paid claims to determine whether services were actually provided, medically necessary, coded correctly, and properly paid or denied. 

Are providers required to cooperate with the RAC?

Providers are required by Section 1902(a)(27) of the Social Security Act and 10 CCR 2505-10, Section 8.130 to:

  • Retain records necessary to disclose the nature and extent of services provided to recipients.
  • Maintain records that fully substantiate or verify claims submitted for payment.
  • Submit records to federal and state governments upon request.

What happens if the provider does not cooperate?

Any claims for which documentation is not received upon request shall be deemed to be overpayments subject to recovery regardless of whether or not services were provided. The Department will recover the overpayments, per 10 CCR 2505-10 8.040.

Where can I find out more information and who do I contact with RAC questions?

For questions related to the RAC program please contact RAC Contract Manager & Contractor Audit Operations (COA) Unit Supervisor,  Alyssa Gilger, at Alyssa.Gilger@state.co.us.

For payment plans, offset requests, or financial questions, please contact the COA Unit Team at hcpf_corachcpf@state.co.us.