More than $371 million in improper Medicare payments were collected from or repaid to healthcare providers and suppliers in three states by recovery audit contractors in 2007, the CMS reported.
The Recovery Audit Contractor, RAC, demonstration program, created by the Medicare Modernization Act of 2003, identifies and corrects improper Medicare payments paid to healthcare providers participating in fee-for-service Medicare.
CMS report said 96% of the improper payments identified by audit contractors in 2007 in California, Florida and New York were overpayments collected from healthcare providers. The rest were underpayments repaid to healthcare providers. Nearly $440 million has been collected since the program began in 2005. The program began in California, Florida and New York in 2005 and expanded into Arizona, Massachusetts and South Carolina in 2007.
Rep. Lois Capps (D-Calif.), who has introduced legislation to place a one-year national moratorium on the RAC program, dismissed the agencys claims that the program is a success. I find these assertions curious when CMS officials admit there are serious problems with the way the RAC was conducted with regard to inpatient rehabilitation facilities, which make up 88% of the claims denied, she said in a written statement. -- by Jennifer Lubell