OIG Releases Medicare RAC and CMS Action Report

The US Department of Health and Human Services, Office of Inspector General (OIG) has called on the Centers for Medicare & Medicaid Services (CMS) to strengthen activities to prevent improper Medicare payments, including enhancements to the Recovery Audit Contractor (RAC) program.  According to the OIG report, RACs identified only half of all claims they reviewed in FYs 2010 and 2011 as having resulted in improper payments totaling $1.3 billion. While CMS took corrective actions to address the majority of identified vulnerabilities, the agency did not evaluate the effectiveness of those actions, however, so high levels of improper payments may continue. The OIG report also raised concerns about CMS failure to act on all referrals of potential fraud that it received from RACs, along with gaps in CMS evaluations of RAC performance on contract requirements. OIG recommends that CMS address identified vulnerabilities; ensure that RACs refer all appropriate cases of potential fraud; take appropriate action on RAC referrals of potential fraud and enhance RAC performance evaluation. CMS generally concurred with the OIG recommendations.  To obtain a copy of the full report, click here.