CMS to Push RACs Harder to Root out Fraud

In response to an inspector general’s report, the Centers for Medicare and Medicaid Services (CMS) will increase the role of Recovery Audit Contractors (RACs) as a tool to root out Medicare fraud.

The resulting impact on law-abiding healthcare providers in general should be minimal.

Last week the Office of Inspector General in the U.S. Department of Health and Human Services published a report that identified several deficiencies with how CMS manages its RACs with regard to eliminating Medicare fraud. According to the inspector general, CMS had identified 46 different “vulnerabilities” of potential fraud within the Medicare system based on overpayments to healthcare providers found by RACs. At the time of the OIG’s study, CMS had taken steps to address all but 18 of those vulnerabilities. Of the $1.9 billion in overpayments represented by those 46 vulnerabilities, the neglected 18 represented $30 million or 1.5 percent.

During that same period, three of the nation’s four RACs reported six providers for potential fraud, but CMS “did not take action,” according to the OIG.

For those vulnerabilities where action had been taken, CMS “did not evaluate the effectiveness of these actions, which may result in continued high amounts of improper payments,” the OIG writes. “Finally, CMS’s performance evaluations did not include metrics to evaluate RACs’ performance on all contract requirements.”

In its response to the OIG recommendations, CMS either agreed to take additional action or reported that such action had already been taken, with the exception of the “six referrals of potential fraud.” CMS provided no direct response to that recommendation, but instead listed what steps it had taken in all six cases.