It's been 24 years since Medicare began to reimburse hospitals and physicians using ICD-9-CM and CPT-4 code based payment systems. Payment error detection programs continue to flourish with focus centered once again, on overpayments made to facilities, physicians, and suppliers. CMS has successfully implemented a 3-year pilot Recovery Audit Contractor (RAC) program in California, Florida, and New York with national implementation no later than 2010 a certainty. What can hospitals do to prepare for the inevitable? This session provides insights into the current RAC landscape and offers tools and strategies for effective RAC preparedness.