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News: OIG report examines RAC fraud referrals

Case Management Weekly, February 24, 2010

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Recovery Audit Contractors (RACs) referred only two cases of potential fraud to CMS during the RAC demonstration period (March 2005 to March 2008), according to the Department of Health and Human Services (HHS) Office of Inspector General (OIG).

On February 19, the OIG released “Recovery Audit Contractors' Fraud Referrals” which examined to what extent the RACs referred fraud cases to CMS and how much training CMS provided to the RACs during the demonstration period.

Identifying overpayments and underpayments and recouping any overpayments are RACs’ primary responsibilities, but they also refer cases of suspected fraud to CMS. However, the report concludes that not receiving a contingency fee based on referred cases could create a directive for RACs to report such abuses. 

The OIG found that CMS gave no fraud and abuse training to the RACs in the demonstration project. CMS did give a presentation about fraud to the permanent RACs. CMS plans to provide further training on the identification and referral of potential fraud, no date or agenda has been determined.

To improve the RACs ability to identify fraud the OIG recommends CMS:

• determine the outcomes of the two referrals made during the demonstration project,
• implement a system to track fraud referrals, and
• require RACs to receive mandatory training on the identification and referral of fraud.

Source: OIG

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