Medicare RACs recoup $2.4B in overpayments in nine months

The Office of the Inspector General may not think the Centers for Medicare & Medicaid Services is catching all overpaid claims, but hospitals across the country may disagree. So far this fiscal year Medicare recovery auditors reclaimed more than $2.23 billion in overpayments.

The latest CMS data indicates that RACs recouped approximately $2.4 billion in overpayments made to hospitals and other providers in the first nine months of fiscal year 2013. It also reports that providers received $101.9 million back after RAC reviews revealed they were underpaid.

During the third quarter, which ended June 30, RACs recovered $855.3 million in overpayments and gave back $36.3 million in underpayments. The most activity centered on Region D: HealthData Insights, where RAC auditors discovered $289 million in overpayments, primarily due to disputes over medical necessity of minor surgery and other treatment billed as inpatient.

Medical necessity of cardiovascular procedure is the main reason for overpayments in Regions A, B and C.

RACs have been busy in all four regions, according to a recent American Hospital Association survey of more than 12,000 hospitals. The survey revealed that requests for medical records from RACs are up 47 percent since 2012's fourth quarter, Fierce HealthFinance previously reported.

But the OIG has criticized CMS for not catching all overpaid claims and allowing high amounts of improper payments to persist. The most recent report found problems with CMS' action--or inaction--regarding improper payment vulnerabilities and referrals for potential fraud, as well as with RAC performance evaluations.

And a June 2013 OIG audit found CMS' ability to recover billions of dollars in Medicare overpayments is hampered by poor record-keeping, as well as turnover among the contractors responsible for collecting overpayments, FierceHealthcare previously reported.

For more;
- here's the year-to-date CMS report
- check out the third quarter data

Related Articles:
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RAC medical record requests up 47%
OIG: CMS stuck with $543M in 'not collectible' overpayments
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OIG: Tufts Medical Center must repay $1.1M to Medicare 
OIG: Medicare overpays $2.8M to two hospitals and Wisconsin 
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