The California Department of Health Care Services (DHCS) has begun post-payment claims review of Medi-Cal claims in California. The purpose of this audit is to identify and correct improper Medicaid payments through the collection of overpayments and reimbursement of underpayments made on claims for health care services provided to Medicaid beneficiaries. The program will enable the Centers for Medicare and Medicaid Services (CMS) to implement actions that will prevent future improper payments in all 50 states.

DHCS has contracted with Health Management Systems, Inc. (HMS) to act as the Recovery Audit Contractor (RAC) for the State of California. HMS will perform desk and field audits for selected fee-for-service Medi-Cal claims paid within the last three years to determine if claims were paid correctly. HMS will contact providers whose claims have been selected for review. After the initial contact, providers may receive letters from HMS requesting medical records for further review. These letters, which should specify HMS’ preliminary results will be coming out no earlier than October.

DHCS is urging all providers to comply with requests for medical records from HMS. If you fail to submit the requested records, it will be considered a valid overpayment and you will be required to refund the claim payment amount to DHCS. Your cooperation will help ensure that the audit results are accurate and that California retains its much-needed federal matching monies for the Medi-Cal program.

For more information about the audit and what to expect from the contractor, see the HMS Medicaid RAC website. Providers can also contact HMS Provider Services at info@hms.com or (855) 699-6290.

For more information on Medi-Cal audits, see CMA On-Call document #7201, “Medi-Cal Audits.”

Contact: CMA’s reimbursement help line, (888)401-8911 or economicservices@cmadocs.org.