CMS Issues FY 2011 Medicare RAC Report to Congress
The report was the second official Medicare RAC report. CMS concluded that after accounting for RAC contingency fees, appeals and other RAC-related costs, the RAC program saved Medicare more than $488 million in 2011.
The FY 2011 collections figures pale in comparison to the RAC program's projected FY 2012 results. In December, CMS said RACs recouped $2.29 billion in overpayments from providers and returned $109.4 million in underpayments in 2012.
Here are some other major takeaways from CMS' RAC report to Congress. Note: All figures are based on FY 2011.
• CMS spent $129.4 million to operate the RAC program. Of that total, roughly $82 million were paid to the private, for-profit RACs as contingency fees. (RAC contingency fees ranged from 9 to 12.5 percent for all claims except durable medical equipment.)
• Medicare hospitals and other providers appeal almost 61,000 RAC claims, which represent 6.7 percent of all overpayment claims. Of those claims, more than 26,000 claims — or 43.6 percent — were overturned in favor of the provider.
• HealthDataInsights, which is the HHS Region D RAC, collected the most in overpayments in 2011 — $318 million.
• RAC corrections were highest in California, New York, Illinois and Florida.
• The top overpayment denial reasons were medical necessity reviews for renal and urinary tract disorders and medical necessity reviews for acute inpatient admissions for neurological disorders.
• The top underpayment issues were providers using the incorrect MS-DRGs for severe sepsis and lysis of adhesions.
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