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CMS IDs Improper Payments, Top Regional RAC Issues

James Carroll, for HealthLeaders Media, July 27, 2011

The Centers for Medicare & Medicaid Services released a Recovery Audit Contractor update on July 15 that details the amount of overpayments and underpayments identified in the most recent quarter, as well as the total amount identified since the start of the national program.

In the Q3 FY 2011 update, CMS identified $233.4 million in overpayments and $55.9 million in underpayments with a total correction amount of $289.3 million – more than $100 million more than in the previous quarter.

The report shows that the figures identified by CMS continue to grow drastically; in the second quarter of fiscal year (FY) 2011, CMS identified $162 million in overpayments and $22.6 million in underpayments, with a total of $184.6 million in corrections.

While this brief CMS report is essentially self-explanatory, the figures within it are certainly telling, according to Kimberly Anderwood Hoy, JD, CPC,director of Medicare and compliance for HCPro, Inc.

"First quarter in FY2011 was more than all over FY2010 combined. You can really see the efforts being geared up when you look at this report, as each quarter goes up significantly more than the last."

In addition to the figures, the report also contains the top RAC issue per region for Q3 FY 2011. The issues are as follows:

Region A:  Renal and urinary tract disorders (medical necessity)

Region B: Extensive operating room procedure unrelated to principal diagnosis (DRG validation/incorrect coding)

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