Initially RAC demonstration was limited to California, Florida and New York. The results of the demonstration were acceptable because there is an enormous amount to be recovered but there was still plenty of room to improve performance.

Results

The results of the demonstration of the CCR are quite satisfactory in view of the CMS. According to CMS, the demonstration program by the RACs collected most of the overpayment amounts (about 85 percent) and was among the suppliers hospitalization. Half of the overpayments were the result of incorrect coding.1 Although CCR were unable to identify any requests for overpayment, but still managed to correct 1.03 billion U.S. dollars in improper Medicare payments. Approximately 96 percent ($ 992.7 million) of the overpayments were collected providers overpayments, while the remaining 4 percent ($ 37.8 million) were underpayments repaid to providers. MSP RACs collected fewer payments excess ($ 12.7 million) that the claim of the CCR ($ 980.0 million) 2.

The rate of correction of improper payments increased gradually to As the CCR became more systematic. Through the demonstration of 27 March 2008 of $ 1.03 billion approximately 4 percent occurred in fiscal year 2006, 34 percent in fiscal 2007 and 62 percent in the first half of fiscal year 20,083. This should be borne in mind that the total claims available was $ 317 million and the RAC were able to identify only 0.3% of it is $ 1.03 billion. 14% choose the suppliers of appeal against RAC and 4.6% overturned.CMS was an assignment to Econometrica, Inc. to evaluate the validity of the results they produce RAC.

Cost of the RAC

Since its inception through 27 March 2008, the RAC demonstration costs only 20 cents for every dollar collected. RAC contingency fees were 187.2 million dollars over the life of the demonstration. Medicare claims processing costs "were $ 8.7 million and other expenses were $ 5.4 million.

Lesson learned

There is a huge impact that the RAC has created not only in favor of CMS, but also for other companies to begin thinking on the lines that CMS has adopted. It set the tone and set a new trend of the audit.
The key factors are:

 • Claim RACs are able to find a great deal of time is an overpayment overpayment or less.
 • Providers not to appeal the determination of any overpayment.
 • Overpayments obtained were significantly greater than costs4 program.

The general opinion is that the recovery audit contractors have made the process easier to CMS, and CMS thinks along the same lines. It is only because the amount of recovery that RAC has recovered. The amount recovered is good enough? This is a question to be answered. In general, to integrate statistics on the amount of recovery is too high. Payments are made by services that were medically unnecessary or that do not meet Medicare's medical guide lines for the establishment where the service was provided (eg, a claim hospital for three colonoscopies for the same beneficiary on the same date of service, while a colonoscopy day is medically necessary treatment or condition physics in the hospital setting, when treatment could have been safely and effectively provided in ambulatory settings). The other scenario is when payments coding is performed incorrectly.

Future strategy

Future overpayments can be avoided by analyzing services CCR claim of "specific findings. CMS can use this information to implement more professional education and outreach activities or establishment of new editions, with the aim of preventing future improper payments.

References

1. Centers for Medicare and Medicaid. "CMS RAC Status Document, FY 2007: Report on the use of recovery audit contractors (RACs) in the Medicare Program." February 2008
2. The Medicare Recovery Audit Contractor (RAC): Evaluation of 3-year Demonstration Program, June 2008
3. The Medicare Recovery Audit Contractor (RAC) program: An evaluation of 3-year Demonstration Program, June 2008
4. The Audit Medicare Recovery Contractor (RAC): Evaluation of 3-year Demonstration Program, June 2008

With more than 15 years of experience and expertise, Manzoor Hasan MBA, MST, CPA, is CEO at e-Health Vision Inc. and a seasoned consultant in healthcare and other corporate entities. He has extensive expertise in medical management, physician recruitment and as a liaison in negotiations with hospitals, managed care organizations, group practices, HMOs and others.

Hasan has also earned a host of professional designation and honors including Certified Fraud Examiner (CFE), Certified Valuation Analyst(CVA), Certified Professional Manager(P. Mgr), designated (ALHC) (Associate Life & Health Claims) awarded by international claims association with distinction; a fellow of the Life Management Institute(FLMI), awarded by LOMA with distinction; a health insurance associate (HIA) and a Managed Health Professional (MHP), both designations awarded by health Insurance of America.

Ohio State Medical Association – Health Care 2009: Advocacy Agenda & Member Services – Part One