The Centers for Medicare & Medicaid Services plans next month to begin a two-stage roll-out of the permanent Medicare Recovery Audit Contractor program, the agency told the AHA this week. CMS plans to begin RAC preparation activities in March and audit activity in phase-one states in May. Before that, CMS, RACs and state hospital associations will host RAC education sessions for hospitals. Prior to conducting audits, the RACs must receive and process CMS claims data, enter into joint operating agreements with the claims processing contractors in each state, and request CMS approval through the "new issue review process," which grants authority for widespread automated or medical necessity review. CMS now plans to roll out the program in two stages instead of three, in response to a delay caused when two companies that unsuccessfully bid to become RACs protested the bid results. The AHA today issued a special bulletin containing additional details, available to members at www.aha.org/rac.