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News: CMS announces identification of $371.5 million in improper Medicare payments through Recovery Audit Contractor (RAC) program

CDI Strategies, March 6, 2008

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On February 28, CMS issued a press release announcing that the RACs have identified $371.5 million in improper Medicare payments collected from or repaid to health care providers and suppliers in California, Florida, and New York in 2007. Nearly $440 million has been collected since the program began in 2005.

The bulk of the overpayment amounts collected by the RACs (about 85 percent, or $312.8 million) in 2007 were from inpatient hospital providers. The breakdown is as follows:

• $123.8 million due incorrectly coded records
• $106.5 million due to medically unnecessary services
• $29.6 million due to no or insufficient documentation
• $44.8 million due to other reasons (e.g., duplicate claims, double billing)

"We need to ensure accurate payments for services to Medicare beneficiaries and by taking this important step, people with Medicare can be assured they are being charged correctly for their share of their health care services," said acting CMS administrator Kerry Weems in the press release. "The RAC demonstration program has proven to be successful in returning overpayments to the Trust Fund and identifying ways to prevent future improper payments. We will use the lessons we learned from the demonstration program to help us implement the national RAC program next year."

View the press release.
 
Click here for more information on the RAC program and to view the FY 2007 RAC status document.

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