OIG: RAC collections drop

The U.S. Department of Health and Human Services' (HHS) Office of the Inspector General (OIG) disclosed that recovery audit contractors (RACs) will likely recover $3.1 billion in erroneous charges from providers during the first half of the fiscal year--down nearly $1 billion from a year ago.

The OIG, in its semiannual report to Congress, did not disclose the reasons behind the reduction in RAC-related recoveries, but it may be tied to the moratorium on review claims that potentially violate short-stay rules, as well as delays in granting new pacts to RACs. The Centers for Medicare & Medicaid Services extended the old contracts by several months, but also suspended additional documentation requests for complex claims audits. The American Hospital Association also recently sued the HHS, claiming that the backlog for appealing claims has become too burdensome, particularly at the administrative law court level.

The hospital sector has all but crippled the RAC program, Becky Reeves of the American Coalition for Healthcare Claims Integrity wrote recently on Forbes.com. "Under intense pressure from the hospital industry, healthcare officials and lawmakers have brought Medicare oversight to a grinding halt, allowing billions in taxpayer funds to go down the drain," Reeves wrote.

In addition to the collections, OIG reported 465 criminal actions and 266 civil actions against fraudulent activities or those that unjustly enriched providers. It has also excluded 1,720 individuals and entities from participation in federal healthcare programs.

In another report, the OIG concluded that Medicare contractors overpaid hospitals $19.5 million on more than 6,600 claims submitted between January 2009 and September 2012. The overpayments were linked to the hospitals' noncompliance with discharge policies that requires them to claim a lower payment rate when patient are discharged to their homes. Instead, these patients were discharged to postacute facilities that would fall under a per diem payment instead. The OIG recommended that its contractors move to recover the money.

To learn more:
- here's the OIG semiannual report (.pdf)
- check out the OIG report on claims overpayments (.pdf)
- read the Forbes.com article