According to the CMS website, who is subjected to Recovery Audit Contractor (RAC) audits?

The correct answer is that Recovery Audit Contractor (RAC) audits are specifically aimed at providers billing fee-for-service. This encompasses various types of healthcare providers, including hospitals, physicians, and other entities that submit claims to Medicare for services rendered under the fee-for-service model. The primary goal of RAC audits is to identify improper payments, whether overpayments or underpayments, by reviewing medical records and billing claims.

RAC audits are not exhaustive across all healthcare providers; for instance, they do not include those who participate in Medicare managed care plans or non-fee-for-service payment models. Therefore, while all healthcare providers have the potential to be audited under different circumstances, the specific targeting of RAC audits is focused on those who bill fee-for-service. This specific focus is essential for appropriate resource allocation and effective monitoring of compliance among entities that directly engage with the fee-for-service payment structure.