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RAC Oversight Lacking, OIG Charges

Margaret Dick Tocknell, for HealthLeaders Media, September 5, 2013

An OIG review of recovery audit contractor files covering a two-year span identified improper payments in about 50% of them, totaling $1.3 billion. Unless CMS takes action to develop additional performance evaluation metrics, high amounts of improper payment will continue, OIG says.

The Centers for Medicare & Medicaid Services needs to tighten up the oversight of its recovery audit program to evaluate its effectiveness in terms of improper payments identified, the referral of potential fraud cases, and the implementation of corrective action, according to a report from the Office of Inspector General at the Department of Health and Human Services.

In addition, the OIG report notes that recovery audit contractor performance metrics and evaluations are sorely lacking. "Given the critical role of identifying improper payments, effective oversight of RAC performance is important."

While providers, particularly hospitals, have criticized what are sometimes construed as overzealous efforts by RACs, this OIG report suggests that with additional training, RACs could identify even more fraud.

The OIG studied recovery audit contractor files for FY 2010 and FY 2011. During those years, RACs reviewed 2.6 million claims and identified improper payments in about 50% of them totaling $1.3 billion.

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