A RAC denial causing a partial denial would be issued by which entity?

• A. RAC
• B. CMS
• C. OIG
• D. HHS

Answer: (A)

Recovery Audit Contractors are contracted by CMS to review Medicare claims after payment and issue determinations on improper payments. When a claim contains both billable and nonbillable elements, the RAC may issue a partial denial, recouping only the portions found to be incorrect while allowing the rest to stand. CMS oversees the RAC program, but the actual denial letters come from the RACs themselves. The OIG handles fraud investigations, not routine postpayment denials, and HHS is the broader department under which CMS and the OIG operate, not the entity issuing these denials. So, the entity that issues a RAC denial causing a partial denial is the Recovery Audit Contractor.