States are required to establish and implement Medicaid Recovery Audit Contractors (RAC) programs pursuant to Section 6411of the Patient Protection and Affordable Care Act of 2010 (PPACA). On September 16, 2011, the Centers for Medicare & Medicaid Services (CMS) issued a final rule for states to implement this requirement (the Final Rule). The effective date of the Final Rule is January 1, 2012. The U.S. Department of Health and Human Services (HHS) estimates that the Medicaid RAC program will save $2.1 billion over five years, $900 million of which will be returned to the states.
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