RACs return $100 million to providers, as criticism grows

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Sen. Susan Collins (R-ME)
Sen. Susan Collins (R-ME)

Medicare Recovery Audit Contractors returned a record $100.4 million in identified underpayments to providers between April and June.

Figures released by the Centers for Medicare & Medicaid Services also show a 22% drop in overpayments returned from providers to the Medicare Trust Fund in the third quarter. That's likely due to a pause in RAC activity pending a new round of contracts.

Despite this report, providers continue to argue that RACs are too quick to say providers have been overpaid by Medicare — and Congress appears to agree. The latest CMS numbers came just days after members of the Senate Special Committee on Aging blasted the claims review process during a roundtable on strengthening Medicare.

RACs returned more than $8 billion to the trust fund and more than $700 million to providers since 2009. But the Government Accountability Office reported that weekly RAC audits had jumped from 1,500 to 15,000. That has led to a backlog of 460,000 appeals.

GAO Healthcare Director Kathleen King told the Senate committee that improving consistency between different Medicare claims reviewers could lead to more efficiency.

Of four types of contractors conducting post-payment reviews, RACs are the only group whose pay is tied to adjusted claims. King cited GAO numbers showing RACs conducted almost five times as many reviews as the other three contractors combined. 

The American Coalition for Healthcare Claims Integrity countered by saying the RAC program has added four years to Medicare's life expectancy. 

Association spokeswoman Becky Reeves said auditing constraints — and a delay in renewing RAC contracts— could cost $5 billion in recoveries and threaten long-term solvency. 

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