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Medicare RAC Focuses on Medicare Advantage, Prescriptions

Janice Simmons, for HealthLeaders Media, July 20, 2010

Medicare Recovery Audit Contracting has made great strides in recovering millions of dollars lost to waste and fraud in the past few years. However, it will face challenges as it expands to include new areas of Medicare Advantage (Part C), Medicaid, and prescription drug coverage (Part D)—as spelled out earlier this year under the new healthcare reform law—according to those testifying last week before a Senate panel.

These expansions will take the RAC Medicare program beyond Medicare fee-for-service for the first time by Dec. 31, said Deborah Taylor, head of the Office of Financial Management at the Centers for Medicare & Medicaid Services. But while the "RACs proved effective and relevant" to Medicare fee-for-service, "it remains to be seen how this effort will translate into other programs."

"Each of these programs are administered and reimbursed differently and present their own unique challenges," she testified before the Senate Homeland Security and Governmental Affairs' Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security. Medicaid in particular will create new demands since there are more than 50 programs found in the states and territories.

An audit by the Department of Health and Human Services Office of Inspector General (OIG) discovered that "Medicare does not have a strong process" to ensure valid identification numbers on reimbursed prescriptions under the drug program, said subcomittee head Sen. Tom Carper (D-DE).

However, the Office of the HHS Inspector General (OIG) recently found that safeguards for indentifying claims with invalid prescriber numbers were not functioning correctly for Part D claims, Vito said. These problems with Part D actually paralleled problems encountered over the past decade with Medicare Part B for medical devices.

In its report released last month, for instance, the OIG found that more than 18 million prescription drug records in 2007 had invalid prescriber identifiers, he told the Senate Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security. With these identifiers, which represented 2% of all Medicare Part D claims, pharmacists were paid more than $1.2 billion in one year.

One invalid prescriber identifier that did not meet format specifications was a string of nine zeroes: However, this single invalid identifier accounted for nearly 40,000 prescription records worth $3.7 million in 2007, Vito said.

CMS's implementation of National Provider Identifiers—the standard method now being used to identify prescribing physicians on Part D claims—and its agreement to take steps to address recommendations in the latest OIG report indicates "the agency plans to address these vulnerabilities," Vito said.


Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at jsimmons@healthleadersmedia.com.

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