Tuesday, November 3, 2015

CMS 2014 RAC Program Performance Report

Dianne De La Mare

The US Department of Health and Human Services, Centers for Medicare & Medicaid Services (CMS) has released its statutorily-required annual report regarding the Medicare Fee-for-Service Recovery Audit Contractor (RAC) report. The report provides information on 2014 total RAC recoveries, audit accuracy, integrity efforts and a list of actions that CMS has taken to “alleviate provider burdens” associated with the RAC program.

Specifically, the report indicates that the RACs collectively identified and corrected 1,117,057 claims for improper payments, resulting in correcting $2.57 billion dollars in improper payments in FY 2014. The total corrections include $2.39 billion in over payments collected and $173.1 million in underpayments repaid to providers. The report also indicates that, after taking into consideration all costs of the program (e.g., contingency fees and amounts overturned on appeal), the RAC program returned over $1.6 billion to the Medicare Trust Fund.

Importantly, the report’s Appendix outlines the percentage of claims overturned at each level of appeal, and finds that 42 percent of claims subject to a RAC audit are overturned at the 3rd level of appeal, or at the Administrative Law Judge (ALJ) level. The report also discusses changes that CMS is making to improve the RAC program and the number of appeals being overturned.

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