A Recovery Audit Contractor’s primary task is to review Medicare claims data and determine if a claim was appropriately paid. The fee-for-service (FFS) Medicare Recovery Audit Program is authorized under the Social Security Act, and an annual report on the performance of the Recovery Audit Contractors (RACs) must be submitted to Congress. The report must include information on the RACs’ performance in identifying under- and overpayments and recouping overpayments, as well as an evaluation of the comparative performance of the contractors and savings to the program. On October 15, the Centers for Medicare & Medicaid Services (CMS) posted the “Fiscal Year 2014 Recovery Audit Program Report to Congress” on its website.
In fiscal year (FY) 2014, the RACs identified and corrected $2.57 billion in improper payments, collected $2.39 billion in overpayments, and identified and paid providers underpayments of $173.1 million. Program corrections were $1.2 billion, or 31.5 percent below program corrections in FY 2013. The drop in FY 2014 recoveries is attributed to CMS prohibiting the RACs from performing inpatient hospital patient status reviews for claims with dates of admission on or after October 1, 2013.
Data for FY 2014 Part B claims, which include durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS), indicated that 712 appealed claims were decided. Of these 712 claims, 418, or 58.7 percent, were withdrawn or dismissed (including those withdrawn by the appellant); four, or 0.6 percent, were remanded to Qualified Independent Contractors (the second level of the claims appeal process); and 181, or 25.4 percent were overturned (includes fully favorable and partially favorable claims).
The report also stated that the four RACs had overall accuracy scores of 91 percent or higher during FY 2014; the accuracy score represents how often the RACs accurately determined over- or underpayments.
