RAC Audits are a reality. What is an RAC? An RAC is a Recovery Audit Contractor contracted by the CMS Office of Program Integrity. They completed their demonstration Project in 2005 – 2008 in the states of FL, SC, NY, MA and CA. The result, they recovered more than $450M (Well they had to return some of on appeal…but who’s counting?). Now there is a Permanent RAC Program, which was established in 2009. Look it up at www.cms.hhs.gov/rac. There they list who are the Contractors and what they are looking for specifically in each geographic region they cover. And by the way, each RAC auditor looks at the others to see what they are doing/did and who recovered more money. RACs conduct audits of paid claims and recover improper payments AND identify underpaid claims. They are paid a % of recoveries – No recovery = no commission. MPI is aware of this and track these audit’s “de jour” on-line.