Early in the decade, RAC audits, which stands for recovery audit contractors, concentrated only on hospitals and started recovering untold millions of dollars for Medicare. It came about once the federal government saw how successful OIG (office of inspector general) audits were. The audits started on the east coast and started to spread across the country from there.

At this point, the federal government has given more funds to the program to not only cover the rest of the country in greater numbers, but to start going after more physician practices. This has to scare those physicians whose offices haven't hired offsite companies to handle their accounts receivables and haven't had someone consistently monitoring and auditing their records for errors.

Yes, if you didn't know it already, a big part of the audits concern looking at the medical records and comparing them with what's been billed. And these days they don't always come into your office. They'll have you send your records to them either electronically or on paper and trust me, they will take back money. The thing to worry about is whether they'll take back a little or a lot.

It's always better to hire someone independently to come in and look at your records to see if things are going your way. Self reporting errors always works in your favor, and you might find that you'll actually increase your revenue by capturing things properly. The money you spend up front is way better than the money you'll lose on the back end, not to mention having it show up in the newspapers that your practice has been fined by the federal government.

You can't fight it, so you might as well be proactive against it. So I'll ask this question again; are you ready for a RAC audit?