In section 306 of the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (MMA), Congress directed the
Department of Health and Human Services (DHHS) to conduct a 3-year
demonstration program using Recovery Audit Contractors (RACs) to detect
and correct improper payments in the Medicare FFS program.
The
Recovery Audit Contractor (RAC) demonstration program was designed to
determine whether the use of RACs will be a cost-effective means of
adding resources to ensure correct payments are being made to providers
and suppliers and, therefore, protect the Medicare Trust Fund. The
demonstration operated in New York, Massachusetts, Florida, South
Carolina and California and ended on March 27, 2008.
RACs
succeeded in correcting more than $1.03 billion of Medicare improper
payments Approximately 96% of these were overpayments collected from
providers, while the remaining 4 percent were underpayments repaid to
providers.
Section 302 of the Tax Relief and Health Care Act of
2006 makes the RAC Program permanent and requires the Secretary to
expand the program to all 50 states by no later than 2010.
According
to CMS, the RAC demonstration program has proven to be successful in
returning dollars to the Medicare Trust Funds and identifying monies
that need to be returned to providers. It has provided CMS with a new
mechanism for detecting improper payments made in the past, and has
also given CMS a valuable new tool for preventing future payments.
The
goal of the recovery audit program is to identify improper payments
made on claims of health care services provided to Medicare
beneficiaries. Improper payments may be overpayments or underpayments.
Overpayments can occur when health care providers submit claims that do
not meet Medicare's coding or medical necessity policies. Underpayments
can occur when health care providers submit claims for a simple
procedure but the medical record reveals that a more complicated
procedure was actually performed. Health care providers that might be
reviewed include hospitals, physician practices, nursing homes, home
health agencies, durable medical equipment suppliers and any other
provider or supplier that bills Medicare Parts A and B.
It is now
more critical than ever that you review your current billing and
compliance policies to ensure that you are in line with the regulations
required by the Centers for Medicare and Medicaid Services so that you
can take corrective action immediately if inconsistencies are
identified.
To learn more about Atlantic Financial Consulting and to sign up for
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