As reported by FierceHealth, a recent report by the Office of Inspector General claimed the Centers for Medicare & Medicaid Services may not be catching all overpaid claims and therefore allowing high amounts of improper payments to persist.
The report found problems with CMS’ action–or inaction–regarding improper payment vulnerabilities and referrals for potential fraud, as well as with RAC performance evaluations.
According to the story: “Medicare recovery auditors (RACs) reviewed 2.6 million claims in fiscal years 2010 and 2011 and identified roughly half of the claims with improper payments totaling nearly $1.3 billion.
While CMS identified 46 vulnerabilities that resulted in improper payments, it only took corrective action to address 28 of them and failed to evaluate the effectiveness of these actions. The OIG pointed out that by not evaluating corrective actions CMS can’t determine if they effectively reduce improper payments.
Moreover, by June 2012, CMS still had not taken corrective action on the remaining 18 vulnerabilities that totaled $31 million in improper payments.
The report also showed CMS received six referrals of potential fraud from RACs but had not addressed them as of last November.
CMS also failed to evaluate RACs’ performance on all contract requirements. For example, the performance evaluations did not assess RACs’ timeliness or documentation requirements for referring potential fraud to CMS.
The OIG called on CMS to evaluate the effectiveness of corrective actions, review and take appropriate action on fraud referrals, and develop additional evaluation metrics to improve RAC performance–recommendations to which CMS mostly agreed, accoding to the report summary.”
Also reported: “an OIG audit found the ability of CMS to recover billions of dollars in Medicare overpayments is hampered by poor record-keeping, as well as turnover among the contractors responsible for collecting overpayments. What’s more, the agency is stuck with $543 million in ‘not collectible’ overpayments”.
This is not the first time a criticism has been raised with a focus on RACs. In a previous story, FierceHealth noted: “Hospital and health system leaders briefed congressional staff Friday on the problems they face due to inappropriate payment denials by Medicare recovery audit contractors, AHA News reported. Steven Hanks, M.D., executive vice president and chief medical officer at The Hospital of Central Connecticut, said that despite medical need, too often RACs deny payment for inpatients on the grounds that the services should have been provided in the outpatient setting. Hospitals have appealed 96% of the denials and successfully overturned 94% of them, Hanks said. While he agreed that RACs should go after hospitals and health systems that are involved with fraudulent and abusive practices, Hanks said they should not indiscriminately deny claims.”