Certified Revenue Cycle Representative (CRCR) Practice Exam

What action must a claims processing contractor take when Recovery Audit Contractors (RAC) identify overpayments?

1. Assume legal responsibility for repaying the overage amount

2. Make recovery of the overpayment the top processing priority

3. Send a demand letter to the provider to recover the overpayment amount

4. Conduct an audit of all the affected provider's claims within the past twelve months

The correct answer is: Send a demand letter to the provider to recover the overpayment amount

When Recovery Audit Contractors (RAC) identify overpayments, the appropriate action a claims processing contractor must take is to send a demand letter to the provider to recover the overpayment amount. This demand letter formally notifies the provider of the identified overpayment and requests repayment. This process is a critical step in ensuring that the healthcare system maintains financial integrity and that providers are accountable for their billing practices. The demand letter typically includes details about the overpayment amount, the reasons for the overpayment, and instructions for repayment, which are vital for clear communication between the contractor and the provider. While the other options suggest important actions that could be associated with managing overpayments, such as prioritizing recovery or auditing claims, the correct action specifically requires the issuance of a demand letter as a direct approach to initiate the recovery process.