CMS' Recovery Audit Contractors Program Gets Green Light

CMS is ratcheting up its efforts to ferret out fraud and abuse in the Medicare system with nationwide expansion of a three-year pilot program that the agency reports netted more than $900 million in Medicare overpayments between 2005 and 2008.

The agency's Recovery Audit Contractors, or RAC, program demonstration also returned about $38 million to physicians and other health care providers who had been underpaid for health care services provided to Medicare beneficiaries, according to a CMS fact sheet. The nationwide program will be phased in throughout the remainder of 2008 and 2009 under a specified expansion schedule. (1-page PDF; About PDFs)

According to CMS Acting Administrator Kerry Weems, M.B.A., by implementing the RAC program nationwide, CMS is "continuing to build our fraud fighting and program integrity efforts by identifying high-risk areas and trends to better focus our limited funds and resources."

CMS also announced recently it had awarded contracts to four companies to implement the permanent RAC program, along with a list of states under each company's jurisdiction.

The RAC companies will be paid contingency fees -- ranging from 9 percent to 12.45 percent -- based on both the underpayments and overpayments discovered.

CMS pledged to hold town hall meetings in October and November to communicate directly with physicians and other Medicare providers before the permanent RAC program becomes operational.

On Oct. 20, a CMS spokesperson said that the dates and locations for those meetings had not yet been set, but added that the information would be posted on the CMS Web site as soon as details become available.

In preparation for implementation of the RAC program, CMS urged physicians to take proactive steps in their own practices by

Any physician who receives a request from the RAC program for repayment of a claim will have 120 days to file an appeal.

Additional details about the permanent RAC program and an evaluation report on the RAC demonstration project are available online.