Recovery audit contractors (RACs) returned $214 million to the Medicare program in fiscal year 2016, according to the latest annual report released by the Centers for Medicare & Medicaid Services (CMS).

That's a 50% increase compared to the previous year, but one organization believes limits on the amount of documentation RACs are allowed to request prevents the contractors from recouping even more overpayments.

The report (PDF), issued on Wednesday, shows that RACs identified $473.9 million in improper payments in fiscal year 2016, including $404 million in overpayments. After accounting for $69 million in underpayments restored to providers, $61 million returned on appeal, $39 million in RAC contingency fees and $21 million in CMS administrative fees, the program recouped more than $200 million, a $4.57 return for every $1 invested.

Of those $404 million in overpayments 63% came from inpatient hospital claims, including coding validation reviews.

However, CMS notes that RAC collections represent less than 0.1% of the $374 billion in Medicare expenditures in 2016. It's also less than 1% of $41 billion in improper payments identified by the agency's Comprehensive Error Rate Testing program.

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The Council for Medicare Integrity says RACs are hamstrung by federal regulations that limit documentation requests. The $473 million in identified overpayments is a small increase from the $440 million identified last year, and a huge decrease from the $3.75 billion identified in fiscal year 2013.

“Recently, CMS Administrator Seema Verma shared concerns that the Medicare program reviews less than three-tenths of 1% of the nearly 1.5 billion claims paid each year,“ Kristin Walter, spokesperson for the Council for Medicare Integrity, said in a statement. "This lack of oversight is taking place at a time when the program is losing approximately $40 billion per year due to preventable billing mistakes."

Walter urged lawmakers to expand the program and give auditors the ability to conduct prepayment reviews.

But the RAC program has also been plagued with an appeals backlog that eventually landed the Department of Health and Human Services in court. The agency has said the 445,000 remaining pending appeals are expected to be wiped out by 2022. A federal judge previously ordered the agency to clear the backlog by Dec. 31, 2020.