RACs reclaim $1.37B in overpayments as criticism mounts

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In the first six months of fiscal 2013, Medicare recovery auditors (RAC) collected $1.37 billion in overpayments and returned $65.4 million in underpayments, according to new data from the Centers for Medicare & Medicaid Services.

So far, RACs already recouped more than half of the total $2.29 billion in Medicare overpayments collected last year. In the first half of 2013, the recovery auditors haven given back more than half of last year's $1.09 billion in total underpayments.

All four Medicare recovery auditors named medical necessity as their top issue, with three citing problems with cardiovascular procedures and the remaining RAC citing minor surgical procedures.

Altogether, the program corrected $5 billion in faulty Medicare payments since it began in October 2009, according to CMS.

These figures come on the heels of CMS adjusting the limits for additional documentation requests in the RAC program. As of April 15, RACs can request a minimum of 20 records in a 45-day period, down from the prior 35-record minimum.

However, the Office of Inspector General remains critical of CMS and its recovery programs. Despite recouping more than $1 billion in Medicaid overpayments, the OIG claimed the agency failed to respond quickly enough to collect about $226 million in overpayments to 11 states, according to a February report.

With healthcare dollars on the line, some hospitals executives also are reproaching the Medicare and Medicaid RAC programs. For instance, Health Management Associates believes second-guessing by Medicare recovery auditors jeopardizes its physicians and patients. The shift to observation status is a "troubling consequence" of RACs, limiting patients' options and deteriorating hospital financial performance, Kerry Gillespie, executive vice president of Operations Finance for Florida's HMA wrote in a March guest commentary for FierceHealthFinance.

 For more:
- here's the CMS data (.pdf)

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