Hospital officials complain to senate panel about Medicare efforts on observation care

Overly aggressive practices of contractors charged with recovering inappropriate Medicare payments are causing headaches for hospitals and patients, hospital executives told the Senate Finance Committee Tuesday. Recovery Audit Contractors – or RACs – uncover and collect improper payments made to hospitals, physicians, clinics and other providers. In 2011 the audits resulted in the return of nearly a half a billion dollars to the Medicare Trust Fund. "We need to build on this success, but we can't overburden legitimate providers who play by the rules," Finance Committee Chairman Max Baucus, D-Mont., said Tuesday. "We need balance."