Sarah Thompson is working at ABD Rural Clinic in West Texas. Ms. Thompson does not receive health insurance or any other benefits, beyond monetary compensation for her work. It is expected that the HIM department will be in compliance with all state, federal and Joint Commission regulations. She works under contract for the facility but is not listed as an employee of the facility.

The facility has just undergone a RAC audit and must now pay a substantial fine. The administrators of the facility believe this is justification to terminate Ms. Thompsons contract?

Can the facility use the RAC fine as a basis for terminating the contract? Summarize the reasons for your decision.