Three organizations aimed at reducing government waste have issued a letter to the Senate criticizing recent policies that have minimized the impact of the Recovery Audit Contractor (RAC) program.
A coalition made up of the Council for Citizens Against Government Waste, the National Taxpayers Union and Americans for Tax Reform called on lawmakers to preserve "one of the most successful improper payment recovery programs ever enacted into law." The coalition highlighted the high recovery rates of RACs from 2010 to 2013, when the Centers for Medicare & Medicaid Services (CMS) began recalibrating the program.
The letter argues that the RAC program helped drop the Medicare improper payment rate from 10.8 percent in fiscal year 2009 to 8.5 percent in 2012. In 2013, RACs collected nearly $4 billion in overpayments.
Since then, CMS has gradually handcuffed RACs--thanks, in part, to constant pressure from the provider community that compared RACs to bounty hunters. Hospitals complained that they faced millions in administrative costs due to RAC audits, which were particularly onerous on smaller facilities. As a result, RAC recoveries dropped to $2.4 billion in 2014.
For the coalition, the tipping point occurred last month when CMS issued a new directive that reduced the percentage of hospital claims RACs are allowed to audit from 2 percent to 0.5 percent, starting in January.
"CMS' under-the-radar manipulations are effectively nullifying one of the most successful programs that Congress has mandated to curb Medicare fraud, waste and abuse," the coalition wrote in its letter, citing a 12.7 percent Medicare improper payment rate in 2014. "The authority of CMS to unilaterally suspend the program or reduce document requests is unclear. Instead of facilitating the RAC program's demise, the agency should, on behalf of its 54 million beneficiaries and taxpayers, be exploring ways to expand the program."
- read the coalition's letter
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