HHS brings back Medicare program that caught $8B in wasteful payments

The Centers for Medicare and Medicaid Services (CMS) plans to bring back a Medicare oversight program that has spotted more than $8 billion in wasteful, fraudulent and abusive payments to healthcare providers since 2009, but was canceled two months ago.

The Recovery Audit Contractor (RAC) program finds instances where healthcare providers have improperly overbilled Medicare and requires them to return the money. 

But the CMS contract for its Medicare recovery program expired on June 1, leaving healthcare providers free to overbill the system without penalty. In emails to congressional offices, CMS said it will restore the program this month on a limited basis.

RAC will be allowed to review a limited number of claims under the new contract, including those for spinal fusions, outpatient therapy services, durable medical equipment, prosthetics, orthotics and supplies, and cosmetic procedures.

However, RAC will not review claims short inpatient stays, which account for 91 percent of the money the program has recovered for Medicare in the past, according to Becky Reeves, spokeswoman for the American Coalition for Healthcare Claims Integrity, who said this is a step in the right direction but more needs to be done to reform the system.

RAC caught $3.7 billion in wasteful payments that Medicare made to healthcare providers in 2013, and according to a study by the American Coalition for Healthcare Claims Integrity, it was on pace to bring back $5 billion this year.

“Today is a good day for taxpayers and seniors,” Reeves said. “This development signals a renewed focus on protecting Medicare’s finite resources, strengthening the Medicare Trust Fund and ensuring seniors’ long-term access to care."