At a White House meeting yesterday, Vice President Biden announced new initiatives aimed at tackling government spending waste, including one to fight waste in Medicaid that could save taxpayers more than $2 billion.
"Today's announcements on cutting waste in Medicare, Medicaid and Unemployment Insurance shows that we can make our government more efficient and responsible to the American people," said Vice President Biden at the meeting. "If we're going to spur jobs and economic growth and restore long-term fiscal solvency, we need to make sure hard-earned tax dollars don't go to waste."
Biden, along with Health and Human Services Secretary Kathleen Sebelius, said that HHS' release of its final rule for the Medicaid Recovery Audit Contractor Program, a waste-cutting program created by the Affordable Care Act, will save $2.1 billion over the next five years, of which $900 million will be returned to states. The new program is based on the Medicare Recovery Audit Contractor program, which Biden said has already recovered nearly $670 million to date in 2011.
[See also: CMS' recovery audit contractor update details millions in payment corrections; Affordable Care Act Triggers RAC Expansion to Medicaid, Medicare Advantage and Part D]
"Today we are building on an already successful program that targets improper payments in our healthcare programs and recovers those dollars, making Medicare and Medicaid more reliable and responsible," said HHS Secretary Kathleen Sebelius in a press release. "We simply can't afford to see even one penny of our healthcare dollars wasted and expanding this program will help us reach that goal."
The Medicare RAC program, was begun as a limited scope demonstration project that provided for post-payment audits of Medicare providers aimed at finding both underpayments and overpayments to providers by Medicare. The demonstration project ran from 2005-2008 and based on its results, CMS rolled out the program nationwide in 2010. In mid-2008 the Centers for Medicare & Medicaid Services announced that the Medicare RAC demonstration had identified more than $1 billion in payment errors by Medicare – the vast majority of which (more than $992 million) were overpayments to providers.
CMS hopes to bring similar savings to the Medicaid program to both save the federal government and individual states money. But the roll out of the Medicaid RAC program has not gone as smoothly as CMS had wished.
Originally slated to launch April 1, CMS announced in February that it was delaying the launch amid industry concerns that it had not provided states enough guidance for how to design and implement its RAC programs.
The final rule for Medicaid RACs has a new effective date of January 1, 2012.