Medicare collects $1.27B in overpayments

The total of alleged Medicare overpayments identified by recovery audit contractors (RAC) has reached $1.27 billion since October 2009 and is quickly growing, although appeals remains largely successful, according to a report issued by the Centers for the Medicare & Medicaid Services.

The report said RACs identified and collected $397.8 million in overpayments during the first quarter of fiscal 2012 (October through December 2011) alone. That's the largest amount of improper payments recovered during one quarter since the RAC program began, Sen. Tom Carper (D-Del.), Chairman of the Senate Subcommittee on Federal Financial Management, noted last week.

Regional RAC hotspots include lack of insufficient documentation for admission of inpatients for neurological disorders, cardiovascular procedures, and minor surgeries and other procedures billed as inpatient stays.

As for identified underpayments, $141.9 million was returned during fiscal 2011, which ended on Sept. 30, and $24.9 million during the first quarter of fiscal 2012. Returned underpayments total $183.7 million to date.

Altogether, hospitals are appealing about one-third of overpayment determinations, with 73 percent of those overturned, noted AHA News Now.

For more information:
- here's the CMS RAC report (.pdf)
- read the AHA News Now brief
- read Sen. Carper's statement

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