The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 established theMedicare Recovery Audit Contractor (RAC) program to combat fraud and waste in the Medicaresystem. Initially launched in 2005 as a demonstration project in three states (California, Florida, andNew York), Congress in the Tax Relief and Health Care Act of 2006 made the RAC program permanent.It now operates in all fifty states. Further, as is discussed below, the Affordable Care Act requiredthat states establish Medicaid RACs and California’s Department of Health Care Services (DHCS)(which administers the Medi-Cal program) may enter into one or more contracts with RACs. (Welfare& Institutions Code §14170.12.) This ON-CALL document will discuss the history of the RACprogram and provide answers to the most commonly asked questions regarding Medicare RAC audits.