Provider Notice Issued 04/19/2024

Date:   April 19, 2024

To:      Enrolled Hospitals: Chief Executive Officers; Chief Financial Officers; Patient Accounts Managers; and Health Information Management Directors 

Re:      Recovery Audit Contractor (RAC) Audits   _______________________________________________________________________________________________________________________________________________________

This notice advises hospital providers that the Illinois Recovery Audit Contractor (RAC) audits have commenced. RAC is a federally mandated audit program under Section 6411 of the Patient Protection and Affordable Care Act of 2021 and is required of all state Medicaid agencies to supplement program integrity compliance requirements. Currently, RAC audits are limited to the Medicaid fee-for-service patient population.

RAC audits are conducted through the Illinois Department of Healthcare and Family Services Office of Inspector General (HFS-OIG) contractor, Health Management Systems, Inc., (HMS), a Gainwell Technologies Company. HMS will be conducting two primary types of audits, automated and complex, each with a distinct process. Automated audits rely on algorithms and analytics to identify potential errors in billing. Complex audits require a review of the medical records and supporting documentation to verify the medical necessity of the service or the appropriateness of the paid claim pursuant to Illinois Medicaid policy and rules. 

HMS will notify providers via a letter mailed to the contact address listed in IMPACT that a complex audit has been initiated and will identify records requested for the payment review.  Compliance with the records request is required for proper review.

Failure to comply with a RAC audit may result in a final audit decision of an overpayment, payable to HFS-OIG within 60 days of notice of the overpayment. Audit findings may also result in sanctions or other penalties, including but not limited to: (1) termination or suspension of the provider's eligibility to participate as a Medicaid and/or CHIP provider; (2) suspension or denial of the provider's payments; and (3) civil monetary penalties.

All RAC audits are maintained by and may be tracked in the HMS Provider Portal. This Portal is a secure, web-based system that allows providers to access audited claims information. To set up your account, contact HMS Provider Services at 855-699-6292 or register at  

HMS - Portal / Login.   

Providers may list an alternative address from the one listed in IMPACT for receiving HMS communications by contacting HMS Provider Services or online via the “Provider Communications” page on the HMS web portal, by choosing “add alternative address.” To ensure communications are directed to the alternate address, click on the ellipses next to the address chosen to make this address primary. Adding an alternative address does not delete or replace the main Provider address. HMS directs all communications to the primary address, as indicated by a green “primary” button. Address changes will take effect immediately in the HMS system for all HMS communications.  

A significant percentage of HMS's record requests have not received a response, which will result in findings and collection activity against providers unless corrected, so check your registration information as soon as possible.

Questions regarding this notice may be directed to HFS.OIG.BMI.RAC@Illinois.gov.

Brian Dunn
Inspector General
Illinois Department of Healthcare and Family Services