RACs correct $92.3M in improper payments

The government corrected $75 million in Medicare overpayments and $16.9 million in underpayments in fiscal year 2010, according to the first Centers for Medicare & Medicaid Services (CMS) report on the National Recovery Audit program to Congress.

With nearly 1 billion claims each year submitted by more than a million providers (hospitals, skilled nursing facilities, labs, ambulance companies, etc.), CMS recognizes that "it is impossible to prevent all improper payments due to the large volume of claims," according to the report. To correct the payment errors, CMS launched the Recovery Audit program nationwide in January 2010, which was based on the previous, successful regional Recovery Audit demonstration launched in 2005. Medicare contractors identify and correct areas to ensure Medicare compliance.

In its first year of the national program, recovery auditor contractors (RACs) corrected a combined $92.3 million in over- and underpayments. Eighty-two percent were overpayments, and 18 percent were underpayments that were refunded to providers.

Improper payments typically fall into three categories of errors, including payments for items or services that do not meet Medicare's coverage, payments for items incorrectly coded, and payments for services without appropriate documentation to support the service. In rare situations, though, improper payments result when providers failed to submit documentation when requested, according to the report.

For more information:
- check out report (.pdf)

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