2011 RAC Audits Save $488 million of $797 Million Collected

After underpayments and costs, only $488 million goes to trust fund; DME overpayments account for less than 5% of overpayments.

• By David Kopf
• Feb 07, 2013

Medicare Recovery Audit Contractors (RACs)  corrected $939.3 million dollars worth of claims during 2011, but suffered an 44 percent overturn rate on appeals, according to "Recovery Auditing in the Medicare and Medicaid Programs for Fiscal Year 2011" a report sent by HHS to to Congress.

Some key findings from the report:

• Recovery Auditors identified and corrected $939.3 million in improper payments.
• There were $797.4 million collected overpayments and $141.9 million identified underpayments that have been paid back to providers.
• DME accounted for more than $34 million in overpayments and just over $12,000 in underpayments.
• CMS spent $129.4 million to operate the Medicare FFS Recovery Audit Program, of which $81.9 million were contingency fees paid to Recovery Auditors.
• Administrative costs such as processing appeals, cost of adjusting claims, support contractors, and oversight of the program, accounted for the additional $47.5 million.
• After subtracting all costs, underpayments paid to providers, and reversals after appeal, the audit returned $488.2 million to the Medicare trust fund for 2011.

The report’s of 2011’s claim appeals data shows that DME providers appealed the largest number of claims in Jurisdictions C and D, and that of those claims, 58.9 percent were successfully appealed in the provider's favor in Jurisdiction C and 39.2% in Jurisdiction D. In total, Medicare providers appealed 60,717 claims, 43.6% of those claims were overturned on appeal.

The full report and letters from Kathleen Sebelius to the House and Senate leadership can be downloaded as a PDF at:

https://s3.amazonaws.com/aafh_development/downloads/228/RAC_Report_FY2011.pdf