In order for the Centers for Medicare and Medicaid Services (CMS) to combat fraud and abuse, one of the provisions of the Tax Relief and Healthcare Act of 2006 gave CMS the authority to engage with private contractors to create the Recovery Audit Contractor (RAC) program. These RACs review previously paid claims to ensure that the claims were paid consistent with CMS’ manuals, NCDs, and LCDs. They also refer to prior audits performed by the OIG, CERTs, and use internal data mining utilizing their own proprietary software programs.

The retirement of a LCD is considered by many to be a blessing rather than a problem because while a LCD is active, claims denials are automatic if the requirements of the LCD are not met. This forces the provider to obtain an advance beneficiary notice (ABN). Further, laboratories must maintain a database of LCD edits and update them when LCDs change or new ones are issued. Many think this all goes away when a LCD is retired. Think again!