GAO recommends reinstituting RAC prepayment reviews

The Centers for Medicare & Medicaid Services (CMS) must allow recovery audit contractors (RACs) to conduct prepayment review, the Government Accountability Organization (GAO) recommends, citing higher recoveries than traditional pay-and-chase methodology.

The GAO found that in 2013 and 2014, prepayment reviews conducted by RACs recovered $14 for every dollar paid by CMS. Although questions have been raised regarding contingency fees paid to RACs, the agency determined prepayment and postpayment reviews were generally conducted in similar ways, and prepayment reviews offer better protection against fraudulent payments. The Department of Health and Human Services, however, disagreed with the recommendation that CMS request legislation to allow RACs to conduct prepayment reviews. Report