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Medicaid Recovery Audits to Begin in 2012


The State of Oregon, Department of Human Services, Office of Payment Accuracy and Recovery (OPAR) has awarded a contract to Health Management Systems (HMS) to serve as the State’s Recovery Audit Contractor (RAC) and provide third party liability (TPL) come-behind services. Third Party Liability (TPL) refers to federal and state laws which require that Medicaid be the payer of last resort; States must recover funds paid by Medicaid programs, found to be the responsibility of another payer (Medicare, commercial insurer, etc).

Under the terms of this contract, HMS will perform services mandated in Section 6411 of the RAC the federal Affordable Care Act, including identifying and recovering improper Medicaid underpayments and overpayments, and detecting Medicaid overpayments arising from provider fraud and abuse. HMS will also review claims subject to TPL requirements to ensure Medicaid remains the payor of last resort. All states must have these programs in place as a condition for receiving federal matching funds. The purpose of these programs is to identify Medicaid members who have or had private insurance, which the state was unaware of at the time services were paid for by Medicaid.

The identification of this information enables states to

  1. seek reimbursement for services it paid from the responsible payer, and
  2. use this information to cost avoid the payment of future claims when they fall within the coverage provided by the primary payer

At this time, HMS and DHS are in implementation stages, and are yet to define specific targets or provider types. HMS and DHS will likely begin overpayment reviews in the spring of 2012. HMS will provide outreach and educational tools to assist providers throughout the RAC process. More information will be forthcoming prior to full scale implementation.


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