Revenue Cycle

GAO plans a review of RAC program

Recovery Auditor Report, August 19, 2008

The Government Accountability Office plans to begin a review of the Medicare RAC program near the end of this year, a spokesman for the department says.

John D. Dingell, D-MI, chairman of the Committee on Energy and Commerce, wrote a letter to the Government Accountability Office July 11 requesting it review the RAC program because of “numerous reports of problems with the implementation of the program.”

Laura A. Kopelson, GAO public affairs officer, said the GAO has accepted the request and plans to begin work on it in about four months. "At this time, there is no specified completion date," she writes in an e-mail to HCPro.

Earlier this year, CMS touted its RAC demonstration project for collecting more than $1.03 billion in Medicare improper payments – $980 million in claim RACs, and $12.7 million in Medicare Secondary Payer (MSP) RACs.

But it is not a perfect system, members of Congress say. Dingell’s letter cited the following problems:

• IRFs complaints. Inpatient rehabilitation facilities (IRFs) in California reported “inconsistent communication, the use of unqualified personnel by the contractor, and review practices inconsistent with Medicare policies.”

• Contingency fee abuse. The demonstration project allowed the RAC to keep its contingency fee so long as it survived the first level of appeal. It did not matter what happened at the ensuing levels.

• Wrong overturns. CMS contracted AdvanceMed to review findings in the pilot states. It found 40 percent of the denied IRF claims were wrong.

CMS did make corrections based on these findings. It stopped reviews of California IRFs; returned the contingency fee if the RAC finding was overturned at any level; ensured incentives are equal to collect overpayments and underpayments; and improved communication.

However, Congress still wants a review, according to Dingell’s letter, which was endorsed by four other members of Congress.

To read the letter in its entirety, click here.

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