Senators see flaws in RAC payment system

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Sen. Mike Enzi (R-WY)
Sen. Mike Enzi (R-WY)

Aspects of the Medicare Recovery Audit Contractor program came under intense scrutiny during a Senate Finance Committee hearing in June. Lawmakers questioned auditor payment incentives and a sluggish appeals process.

Sen. Mike Enzi (R-WY) said he was surprised that RACs are paid upon identifying errors and suggested that this “contingency” system could lead to improper incentives for auditors to identify Medicare overpayments. 

Witness Robert Rolf, vice president of audit company CGI Federal Inc., however, assured Enzi that auditors are paid equally for identifying underpayments to providers as well as overpayments. 

Paying auditors from a set administrative budget will mean auditors put in the same work whether they're looking at a “$1 million issue or a $29 billion issue,” according to Rolf. 

The hearing ended with sharp words from Ranking Member Sen. Orrin Hatch (R-UT). He called the RAC payment system “perverse.” He said he “empathized” with those under “continual pressure” from RAC audits. 


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