States would have up to one year to repay the federal government a share of the money they recoup from fraudulent or improper Medicaid payments, under an amendment approved by the Senate Finance Committee.
Under current law, once state inspectors identify fraudulent practices, they have 60 days to return a portion of the federal dollars back to the government. Under the new amendment, states would instead have a full year to make those payments while expanding the role of recovery audit contractors.
States' Medicaid agencies have long struggled with snuffing out improper payments, and many of them have “turned a blind eye” because of the complexity of the problem, said Sen. Thomas Carper (D-Del.), who inked the amendment. The reform bill aims to strengthen fraud detection within Medicare and Medicaid.
Carper's provision costs $100 million, but would be offset by an expansion of the controversial Recovery Audit Contractor program. The Finance bill would extend the RAC to Medicare Advantage, the prescription drug program Medicare Part D and Medicaid. Carper's amendment requires the CMS to implement RAC programs in Medicare and Medicaid by the end of 2010 while requiring the CMS to submit an annual report on its effectiveness. The CMS would also coordinate the Medicaid RAC program with states.
