CMS report: RACs identified $1.03 billion in improper payments

A CMS report published Friday says that its recovery audit contractor (RAC) pilot program identified $992.7 million in overpayments and $38 million in underpayments. In total, the RAC program returned $693.6 million in overpayments to the Medicare Trust Funds. Total administrative costs of the program were about $200 million, which included the $187.2 million in fees that RACs earned on a contingency basis.

The report states that only 14 percent of RACs decisions were appealed by providers, and among those appeals, nearly $60 million in decisions were overturned.

Of the overpayments, 85 percent were collected from inpatient hospital providers, and the other principal collections were from inpatient rehabilitation facilities (6 percent) and outpatient hospital providers (4 percent), according to the report.

A CMS press release announcing the report’s findings can be accessed here.

In addition, an article on the report from The Wall Street Journal can be accessed here.