A new report by the Centers for Medicare & Medicaid Services indicates the federal government recovered nearly $700 million in improper Medicare payments through its recovery audit contractors (RACs) pilot program.
The three-year pilot project, conducted from 2005-08 in California, Florida, New York, Arizona, Massachusetts and South Carolina, cost the government 20 cents for every dollar collected and is considered by CMS to be a success and worthy of expansion. Information from the pilot will used to help improve the program when it goes nationwide in two years, said Acting CMS Administrator Kerry Weems.
The July 11 final RAC report showed that of the recovered overpayments, 85 percent were collected from inpatient hospital providers, 6 percent were collected from inpatient rehabilitation facilities and 4 percent were collected from outpatient hospital providers. The errors were mainly accidental double billing and miscoding of claims, CMS officials said.
The RAC pilot offered good news to some providers. CMS said it found $37.8 million in underpaid claims made to providers. But for the most part, coding experts predict "unprecedented pressure" for providers when the pilot goes nationwide.
Sheri Poe Bernard, on the advisory board to the American Academy of Professional Coders (AAPC), said most providers aren't ready for the increased scrutiny the RAC program will bring. Many doctors do not currently record their care properly to bill for what took place. When the nationwide crackdown begins, she said, some providers might end up writing a six-figure check to the government and handing over their paperwork to the Office of Inspector General.
"It's not a witch hunt," Bernard said. "I don't think (CMS) is doing the wrong thing here. It's just that doctors have been given a bye on this for so long. They haven't had to ensure they've dotted their "I"s and crossed their "T"s."
Michael Miscoe, also on the AAPC advisory board, said doctors are already under the gun. He helps providers prepare for Medicare billing appeals cases and has seen those cases increase all across the country. According to the RAC report, 14 percent of the providers charged with being overpaid appealed their case to the government, with 4.6 percent overturned on appeal.
CMS officials say the RAC program has had "a limited financial impact on most providers," with the vast majority of hospitals in the pilot states impacted by less than 2.5 percent to their bottom line.
Experts and lawmakers are challenging the program, however, saying RACs are paid to find overpayments, making them partial. House Energy and Commerce Committee Chairman John Dingell (D-Mich.) and Ways and Means Committee Chairman Charles Rangel (D-N.Y.) are calling for a Government Accountability Office evaluation of the program.