The Centers for Medicare & Medicaid Services recently released its 2013 fiscal year (FY) report to Congress on the Recovery Audit Contractors (RAC) program. A Recovery Auditor’s (RA’s) primary task is to review Medicare claims data and determine if a claim was paid appropriately.
In FY2013, RAs identified and corrected 1,532,249 claims for improper payments, which resulted in $3.75 billion in improper payments being corrected. The total corrections identified include $3.65 billion in overpayments collected and $102.4 million in underpayments repaid to providers and suppliers. After taking into consideration all fees, costs, and first level appeals, the Medicare fee-for-service (FFS) RAC program returned more than $3 billion to the Medicare Trust Funds. CMS spent $454.1 million to operate the FFS RAC program, of which $301.7 million were contingency fees paid to RAs.
The most common reasons for improper payments are the following:
- Payment is made for services that do not meet Medicare’s coverage and medical necessity criteria.
- Payment is made for services that are incorrectly coded.
- Payment is made for services where the documentation submitted does not support the ordered service.
The Region C RA, Connolly, had the most corrections in terms of both overpayments and underpayments. Durable medical equipment (DME) and Medicare Part B claims each accounted for 2 percent of the improper payments, while DME accounted for 21 percent of corrected claims and Part B for 30 percent of corrected claims.
In FY 2013, providers appealed 500,629, or 30.7, percent of all claims with overpayment determinations; 836,849 claims were appealed throughout all four levels. Of the total claims appealed, 151,645, or 18.1 percent, were overturned in favor of providers; 9.3 percent of all RA determinations were challenged and later overturned on appeal.
