Congress Tells Sebelius Recovery Audit Program Needs Reform

A bipartisan letter from 111 members of Congress to Secretary of Health and Human Services (HHS) Kathleen Sebelius contends that the Recovery Audit Contractor (RAC) program does not reflect the way the Medicare program is intended to work and needs to be immediately reformed before further problems with the program develop. Lawmakers cite the commission structure used to pay RACs as one of the main issues with the program. The letter states that RACs are incentivized to deny claims, even when the claims are correct. The solution, say the lawmakers, is for CMS to immediately implement reforms such as providing more transparency for providers to help them avoid errors, ensure contractors are identifying real coding and documentation errors, and changing the payment structure for RACs. The Recovery Audit Program’s mission is to identify and correct Medicare improper payments through the efficient detection and collection of overpayments made on claims of health care services provided to Medicare beneficiaries, and the identification of underpayments to providers so that the CMS can implement actions that will prevent future improper payments in all 50 states.