Topic: RAC fiscal year 2007 status document cites $371.5 million in improper payments
HIM Connection, March 18, 2008
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CMS collected $371.5 million in improper Medicare payments during fiscal year (FY) 2007 as part of the recovery audit contractor (RAC) demonstration program in California, Florida, and New York, according to a status document that it released on February 28.
The RAC program, which CMS launched in 2005, stems from the Medicare Modernization Act of 2003. The Act directed CMS to identify overpayments and underpayments, including, but not limited to, the following items and services:
- DRGs
- Durable medical equipment
- High-cost injectable drugs
- Renal dialysis services
- Outpatient services
- Physician services
"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," stated acting CMS administrator Kerry Weems in a CMS press release.
The overwhelming majority of improper payments (approximately 96%) consisted of overpayments collected from healthcare providers. The remaining 4% were underpayments repaid to providers.
The status document cited the following examples of errors that can lead to improper payments:
- A provider bills Medicare for conducting three colonoscopies on the same patient on the same day
- A provider bills Medicare for a particular procedure but then documents that he or she rendered a different procedure
- Medicare pays a provider twice because he or she submitted duplicate claims
- Medicare pays a claim using an outdated fee schedule
This information and more is included in the 2007 RAC status document, which you can view at the CMS Web site: www.cms.hhs.gov/RAC.
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