Medicare said it has recouped more than $1 billion since 2005 under a federal pilot program that uses independent contractors to ferret out improper provider payments, with hospitals accounting for 85% of the financial haul.
In a report issued Friday regarding its recovery audit contractor, or RAC, program, the CMS found that most of the improper payments were made because of billing and coding errors, often when a single procedure was billed multiple times. Other snafus included incorrectly coded procedures and the submission of duplicate claims that resulted in double payments.
Acting CMS Administrator Kerry Weems lauded the results and called the program a success. We need to ensure accurate payments for services to Medicare beneficiaries, Weems said in a statement. With a permanent program, people with Medicare can be assured they are being charged correctly for their share of their healthcare services, he said in reference to the RAC program.
But the report also documents many changes that the CMS plans for the program, many of which have earned the backing of the American Hospital Association, which has been critically of the program since its inception. One of the key changes is that the CMS changed the look-back time from a four-year window to a three-year window, said Don May, vice president of policy at the AHA.
The CMS made some significant steps to improve the program over time. Were generally supportive of the changes that they made to address our concerns, May said. But, he added, They dont go far enough in some cases and we still have other improvements that need to occur before this program rolls out.
Medicare processes more than 1.2 billion claims annually, submitted by more than a million healthcare providers. Errors in those claims can account for billions of dollars in improper payments each year, the CMS said.
All told, the CMS said it has returned $693.6 million of the returned money to the Medicare trust funds after paying for the cost of the program and minus what it had paid back to providers. Roughly 96% of the payments were overpayments collected from providers, while the other 4% were underpayments that were repaid. Overall, 14% of providers appealed the process, with 4.6% of those decisions being overturned.
The program has been criticized at length by hospitals and members of Congress for being a bounty hunter initiative, where contractors get to keep a percentage of the improper payments they collect from providers.
Democratic leaders in the House asked the Government Accountability Office on Friday to investigate the program, specifically with an eye toward CMS' oversight of the program and any preventive measures the agency may have taken against future improper payments.
The program began in California, Florida and New York in 2005, then expanded to three other states in 2007. HHS is required by law to make RAC a permanent, national program by Jan. 1, 2010. -- by Matthew DoBias