RACs Rake in More than $2 Billion from Healthcare Providers

The Centers for Medicare and Medicaid Services (CMS) released its annual appraisal of Recovery Audit Contractors (RACs), and as will come to no surprise to any healthcare provider, the four agencies found more than $2 billion in overpayments.

The new report covers Fiscal 2012, which ended Oct. 1, 2013.

The difference between Fiscal 2011 and 2012 is startling. In 2011, RACs found slightly less than $800 million in overpayments; in 2012 that skyrocketed to nearly $2.3 billion, nearly trebling the previous year.

At the same time, the number of errors found in favor of providers dropped precipitously, from $142 million in overpayments in 2011 to only $109 million in 2012.

The RACs increased focus on the lucrative Part A claims in 2012, and were rewarded handsomely for their efforts. In 2011 the agencies found overpayments in 174,284 claims, in dollar value representing 84 percent of all overpayments; in 2012 they found overpayments in 518,154, representing 91.2 percent of all claims. The amount of overpayment per Part A claim, held steady, increasing slightly from $4,172 to $4,185.

How well did RACs do?

The four RAC agencies collected $142.3 million in contingency fees for Fiscal 2012.

Cumulative accuracy scores shifted dramatically between the agencies. While all were awarded scores greater than 90 percent, Region C (Connolly) watched its scores plummet between 2011 and 2012, from the highest of all contractors at 97.4 percent to 92.5. HDI, on the other hand, went from last to first by lifting its scores from 2011’s 90.7 percent to 2012’s 97.2 percent.