South Dakota receives Medicaid RAC exemption approval

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CMS has approved South Dakota’s State Plan Amendment (SPA) 16-001, granting South Dakota another 3-year exemption from federal requirements to establish a Recovery Audit Contractor (RAC) program. The SPA is effective May 1, 2016.

The state sought exemption from the RAC program, because South Dakota maintains a low rate of errors in Medicaid payments. In addition, the potential amount of payment errors to be recovered is low based on relatively low Medicaid enrollment and there would not be enough revenue generated to fund an adequate contingency fee to attract sufficient bidding attention from vendors.

The approved State Plan Amendment is available here.