RAC recoupments drop dramatically, thanks in part to industry pushback

CMS has also rolled back proportion of claims that can be audited
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Payment recoupments as a result of the work of recovery audit contractors (RACs) dropped dramatically last year, likely the result of pushback from the hospital sector, the Wall Street Journal has reported. And they're about to drop even more.

According to the Wall Street Journal, RACs recouped $2.4 billion last year, down more than a third from the $3.7 billion recovered in 2013.

Moreover, the number of Medicare claims RACs can review will shrink dramatically in January to 0.5 percent of all claims paid during a 45-day period, compared to the current 2 percent. That's according to a recent technical direction letter from the Centers for Medicare & Medicaid Services (CMS), the Wall Street Journal reported.

The hospital community and CMS have been locking horns over the RAC issue for years. CMS has said the program is intended to control costs by reigning in overbilling by hospitals. However, the American Hospital Association and other members of the provider community have said that the RACs act more like bounty hunters running amok than impartial auditors. Moreover, the AHA has also complained about a mounting backlog of appeals of RAC clawbacks, which have clogged the federal administrative law courts.

A spokesperson with CMS told the Journal that the changes help strike a balance between paying Medicare claims appropriately, ensuring beneficiaries have access to services and focusing program integrity efforts on providers who pose the greatest risk.

Pressure from providers to scale back the program is "getting results," Kristin Walter, spokesperson for the primary RAC lobby, the Council for Medicare Integrity, told the paper, adding the revised number of claims that can be reviewed is now a "tiny drop in the bucket."

To learn more:
- read the Wall Street Journal article

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