Medicaid RAC Audits: Improve Efficiency and Decrease Provider Burden

What You Need to Know:

Colorado’s Medicaid Recovery Audit Contractor (RAC) program is the most aggressive in the country, jeopardizing patients’ access to care and Medicaid provider participation. While federal law sets basic requirements for Medicaid RAC audits, 32 states have eliminated Medicaid RAC audits altogether, and the 18 states with them – including Colorado – have significant discretion. Colorado hospitals and providers agree that Medicaid audits have value to ensure the state’s resources are safeguarded from fraud, but they must be warranted, effective, and efficient. Colorado should restore the program to its federal “factory settings.”

Key Points/Hospital Perspective:

• Colorado’s Medicaid Recovery Audit Contractor (RAC) process is the most aggressive in the country, jeopardizing patients’ access to care and Medicaid provider participation.
• A June 2024 report by the Office of the State Auditor confirmed significant operational and oversight issues, including potential misuse of the General Fund. Additionally, the report found numerous failures that have led to excessive administrative burden, unwarranted recoupments, and considerable litigation activity.
• Medicaid audits have value to ensure the state’s resources are safeguarded from fraud, but they must be warranted, effective, and efficient.

CHA Contact: Megan Axelrod, senior director, regulatory policy | [email protected]