Study: CMS failed to act on findings of RAC demonstration project

The Centers for Medicare & Medicaid Services could have collected an additional $231 million in improper Medicare payments during the three-year Recovery Audit Contractor (RAC) demonstration had it taken steps to correct the “vulnerabilities” the program uncovered, according to a new analysis by the Government Accountability Office.

RACs are private companies hired by CMS to audit health care billing records to identify improper payments, which can be overpayments or underpayments.

Five years after the demonstration’s launch, CMS has yet to implement corrective measures or appoint someone to oversee the process, Fierce Healthcare reported.

The study concluded that CMS has ignored 60 percent of the most significant issues uncovered by the RACs.

“CMS did not begin to evaluate the most significant vulnerabilities that resulted in improper payments until almost [two] years after the program began,” the GAO found.

The GAO recommended that CMS take the following steps to remedy the situation:

• Develop criteria to prioritize the activities of the RAC

program’s various components and contractors to

develop adequate measures

to reduce future improper

payments;

• Identify and prevent future Medicare fee-for-service

improper payments; and

• Assess the effectiveness of

the corrective actions taken for reducing future improper payments.