Washington -- The Centers for Medicare & Medicaid Services (CMS) has granted states a reprieve. They will not be required to implement their RAC programs by April 1, 2011.

The announcement, dated Feb. 1, 2011, comes from Peter Budetti, director for the Center for Program Integrity, and Cindy Mann, director for the Center for Medicaid, CHIP and Survey & Certification.

“Out of consideration for state operational issues and to ensure states comply with the provisions of the Final Rule, we have determined that states will not be required to implement their RAC programs by the proposed implementation date of April 1, 2011,” the bulletin states. “Instead, when the Final Rule is published, it will indicate the new implementation deadline. We anticipate the Final Rule will be issued later this year.”

Section 6411 of the Patient Protection and Affordable Care Act of 2010, the Expansion of the Recovery Audit Contractor (RAC) Program, initially required states to establish programs to contract with RACs to audit payments to Medicaid providers by Dec. 31, 2010.

CMS issued a letter to state Medicaid Directors on Oct. 1, 2010 providing preliminary guidance to states about the implementation of their RAC programs. In that letter, CMS indicated that states were to submit to CMS a state plan amendment (SPA), through which the state either would attest that it would establish a Medicaid RAC program by Dec. 31, 2010 or indicate that it was seeking to be exempted from this provision. The letter also stated that CMS expected states to implement their RAC programs fully by April 1, 2011.