RACs recovered $2.4 billion in provider overpayments last year: report

The Medicare Recovery Audit Program identified and corrected more than 1.1 million claims for improper payments worth $2.57 billion in fiscal year 2014, according to a new Centers for Medicare & Medicaid Services report.

This included $2.39 billion in overpayments, the majority of which (84%) involved hospital inpatients. There was also $173.1 million in underpayments to providers discovered, according the report submitted to Congress Thursday.

Skilled nursing facilities received $86 million in overpayments, or 4% of the improper outlays. There was also around $151,000 restored in underpayments. Regionally, the largest amount of SNF overpayments was in the upper Midwest and West Coast (Region D).

"According to CMS, skilled nursing facilities have the second-highest level of improper Medicare billing program-wide,” Center for Medicare Integrity spokesman Kristin Walter told McKnight's. “It's vitally important that all Medicare providers use care when billing the program so they are compensated fairly and improper billing is reduced.

An independent validation contractor said RACs had an average accuracy rate of 96%. Program corrections were 31.5% below the number from fiscal year 2013, CMS added. This reflects limited reviews during the close-out for existing RAC contracts.

CMS spent $460.9 million to operate the Medicare FFS Recovery Audit Program, of which $274.6 million was contingency fees paid to Recovery Auditors, the report states.