October 11, 2012 Articles

Recent Developments in Recovery Audit Contracting

An update on new programs from the Centers for Medicare and Medicaid Services shows how agencies hope to recover over $1 billion in overpayment funds from health care providers.

By Nicholas M. Hudalla, Kelly McCloskey Cherf, and Limo T. Cherian

Following the three-year Recovery Audit Contractor (RAC) demonstration project, which the Centers for Medicare and Medicaid Services (CMS) completed on March 27, 2008, Congress mandated that Recovery Auditors be up and running nationwide by January 2010. CMS, The Medicare Recovery Audit Contractor Program: An Evaluation of the 3-Year Demonstration 3–4 (2008). Under the nationwide RAC program, Recovery Auditors have identified a total of more than $1.27 billion in overpayments. CMS, “Medicare Fee-for-Service Recovery Audit Program FY2012” (2012). Given the success of the RAC program, it is not surprising that the CMS has announced additional audit programs and projects while increasing its efforts to recover funds from providers.

This article will provide a summary of these new programs and efforts, and will also provide an update regarding the Recovery Audit Program.

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