--- title: "RAC, Recovery Audit Contractor | MedTech Terms" description: "CMS contractor that audits Medicare claims for improper payments. Plain-English Reimbursement definition for MedTech teams, with examples and related terms." lang: en json-ld: | { "@context": "https://schema.org", "@graph": [ { "@type": "DefinedTerm", "@id": "https://medtechterms.com/terms/rac-audit#term", "name": "Recovery Audit Contractor", "alternateName": "RAC", "description": "RACs review paid Medicare claims to identify and recover improper payments. 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Recovery Audit Contractor [All terms](/terms) Reimbursement [Quality System](/ecosystems/quality-system)[Hospital Buyer & Reimbursement](/ecosystems/hospital-buyer)RAC # Recovery Audit Contractor CMS contractor that audits Medicare claims for improper payments. Reviewed by [Christian Espinosa, Founder, Blue Goat Cyber](/authors/christian-espinosa) Last reviewed May 5, 2026 ## Definition RACs review paid Medicare claims to identify and recover improper payments. RAC findings can drive billing changes and impact device coverage operationally. What the regulation says The Centers for Medicare & Medicaid Services (CMS) established the Recovery Audit Program to identify and correct improper payments made in the Medicare fee-for-service program. While not a direct regulatory body for MedTech in the same way as FDA, RAC findings influence reimbursement, which is critical for MedTech product viability and market access. Manufacturers must understand coverage and payment policies (e.g., as outlined in Medicare National Coverage Determinations (NCDs) and Local Coverage Determinations (LCDs)) that RACs enforce during their audits. ## What this means in practice Devices with high RAC denial risk (e.g., certain cardiac, sleep, and DME categories) require strong documentation and appeals support. ## Examples - A manufacturer of an implantable cardiac device reviews RAC denial data to identify common documentation deficiencies among providers using their product, then develops targeted educational materials. - A MedTech company analyzes RAC audit findings related to their durable medical equipment, identifying a pattern of denials due to insufficient physician attestation of medical necessity, leading them to revise their provider training. - A team responsible for market access at a MedTech firm monitors RAC activity on similar devices to anticipate potential reimbursement challenges for their new product launch. Common pitfalls - • A common pitfall is underestimating the impact of RAC audits on post-market surveillance data, as denials can sometimes signal issues with product use or documentation in real-world settings. - • Failing to provide comprehensive clinical documentation that clearly substantiates the medical necessity of a device is a frequent cause for RAC claim denials. - • Assuming that a device with FDA clearance or approval automatically guarantees Medicare coverage and positive reimbursement outcomes is a misconception, as RACs enforce coverage criteria independently. - • Inadequate appeal processes for RAC denials can lead to significant unrecovered revenue and skewed perceptions of product value. - • Overlooking the need to educate providers on correct coding and documentation practices, which directly affects RAC audit outcomes, is a critical error. ## Frequently asked questions How do RAC audits specifically affect MedTech manufacturers? RAC audits primarily affect MedTech manufacturers indirectly by influencing provider reimbursement. High denial rates for a particular device can lead to providers hesitating to use it, impacting market adoption and revenue for manufacturers. What kind of payments do RACs target? Are there specific regulations that govern RAC activities? ## Related terms Grouped by theme ### More in Reimbursement · Same category [ Reimbursement 340B Drug Pricing Program(340B) Federal program providing discounted drugs to safety-net providers. ](/terms/340b)[ Reimbursement Ambulatory Payment Classification(APC) The Medicare grouping system that determines hospital outpatient payment amounts under OPPS, analogous to MS-DRGs for inpatient. ](/terms/apc)[ Reimbursement ASC Site-of-Service Shift Migration of procedures from hospitals to ambulatory surgery centers. ](/terms/asc-shift)[ Reimbursement Budget Impact Model(BIM) Financial model that estimates the total cost consequences of adopting a new technology to a payer's budget over a defined horizon. ](/terms/budget-impact-model) Cited by Where this term appears across MedTech Terms. Ecosystems (2) - [Quality System](/ecosystems/quality-system) - [Hospital Buyer & Reimbursement](/ecosystems/hospital-buyer) ## Primary references 3 sources Link health: 3 verified · last checked 2026-06-20 CMS· 1 AMA· 1 AdvaMed· 1 1. [1 CMS RAC Verified CMS · cms.gov ](https://www.cms.gov/research-statistics-data-and-systems/monitoring-programs/medicare-ffs-compliance-programs/recovery-audit-program) 2. [2 AMA CPT Resources Verified AMA · ama-assn.org ](https://www.ama-assn.org/practice-management/cpt) 3. [3 AdvaMed - Payment & Coverage Verified AdvaMed · advamed.org ](https://www.advamed.org/our-work/) Inline markers like \[1\] jump to the matching reference above. Sponsor note ### Need cybersecurity expertise on a connected-device launch? Blue Goat Cyber helps MedTech teams ship connected products that hospital security teams will actually procure. [Book a 30-minute discovery session](https://go.bluegoatcyber.com/meetings/blue-goat-cyber/discovery-session) - No obligation - Expert-led from minute one - NDA available on request MedTech Terms is a community resource sponsored by [Blue Goat Cyber](https://bluegoatcyber.com). Definitions are independent of any vendor. On this term Category Reimbursement Acronym RAC Sources 3 Updated 5/5/2026 [Compare with another term](/compare?a=rac-audit) Learn in 60 seconds Card Lesson Quiz CMS contractor that audits Medicare claims for improper payments. - · Devices with high RAC denial risk (e.g., certain cardiac, sleep, and DME categories) require strong documentation and appeals support. - · RAC findings can drive billing changes and impact device coverage operationally. Remember this Watch out: A common pitfall is underestimating the impact of RAC audits on post-market surveillance data, as denials can sometimes signal issues with product use or documentation in real-world settings. You may also need Auto-suggested from Reimbursement and shared keywords. - [Medicare Administrative Contractor(MAC) ](/terms/mac) - [LCD and NCD ](/terms/lcd-ncd) - [National and Local Coverage Determinations(NCD / LCD) ](/terms/ncd-lcd) - [Transitional Coverage for Emerging Technologies(TCET) ](/terms/tcet) - [Budget Impact Model(BIM) ](/terms/budget-impact-model) - [CMS IDE Coverage (Category A & B) ](/terms/ide-coverage) [All Reimbursement terms](/terms?cat=Reimbursement) MedTech Terms An authoritative, plain-language reference for the regulatory, quality, cybersecurity, and software terms that shape modern medical devices. 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