Senators blast Medicare audits, say RAC payments should be changed

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Sen. Bill Nelson (D-FL)
Sen. Bill Nelson (D-FL)

The Medicare claims review process is unfairly burdening healthcare providers and failing to improve program integrity, due in part to the payment system for certain auditors, Senate leaders said during a roundtable hearing Wednesday. Long-term care providers have long criticized the audit system for these reasons.

Lawmakers from both sides of the aisle slammed the Centers for Medicare & Medicaid Services' anti-fraud efforts at the Senate Special Committee on Aging roundtable. CMS has increased audits but the improper payment rate continues to increase, said Sen. Bill Nelson (D-FL), the committee chairman, and Sen. Susan Collins (R-ME), the ranking member.

One problem is that Recovery Audit Contractors are paid based on their recoveries of improper payments, committee members said at the roundtable and in an accompanying report. This could provide “an incentive to keep improper payment rates high,” the report stated.

Instead, RACs should be compensated through a system that tracks their “effectiveness at reducing improper payment rates over time,” the committee recommended.

RACs have returned more than $8 billion* to the Medicare Trust Fund, the American Coalition for Healthcare Claims Integrity emphasized prior to the roundtable. The event presented an opportunity for discussing how stakeholders “can continue working together to improve Medicare integrity,” said Becky Reeves, spokeswoman for the RAC association.

Different types of audit contractors also are targeting the same areas for potential fraud or errors, resulting in duplicative investigations that burden above-board providers, according to the report. It suggests that CMS should make better use of information from the Comprehensive Error Rate Testing system and instruct different types of auditors to focus on different issues.

Click here to access the complete report. Click here for video of the roundtable.

 *Editor's Note: This article has been updated. It previously stated that the RACs have returned $8 million.

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