CMS: Medicare RACs Take Back $745M in Overpayments in 1Q of 2013

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Medicare Recovery Auditors, also known as recovery audit contractors, set a new record for most overpayments collected in a quarter, as they recouped $744.8 million from hospitals and other providers in the first quarter of the federal government's 2013 fiscal year, according to the latest figures from CMS (pdf).

The previous high for a quarter was $657.2 million, which occurred in the third quarter last year.

CMS did not indicate how many recouped dollars in the first quarter were in the appeals process or had been successfully appealed by providers. Medicare RACs also returned $34.4 million to providers in underpayments, bringing total corrections to $779.2 million.

Medicare RACs have ramped up their overpayment collections significantly over the past two years. In December, CMS reported that in federal FY 2012, Medicare RACs collected $2.29 billion in overpayments from providers, a record that nearly tripled overpayment collections from FY 2011. Since the program started in FY 2010, RACs have taken back $3.9 billion.

Once again, RACs cited medical necessity of cardiovascular procedures as the top overpayment issue. Minor surgery and other treatments billed as inpatient when they should have been outpatient or observation was the other top reason. CMS did not disclose the most common issues for underpayments.

Of the four RAC companies — DCS, CGI, Connolly and HealthData Insights — Connolly was involved with the most overpayments and underpayments in the first quarter (pdf). Connolly, which oversees HHS Region C, recorded $244 million in overpayments and $11.4 million in underpayments.

More Articles on Medicare RACs:

10 Major Takeaways From CMS' FY 2012 Financial Report
Medicare RAC Denials to Hospitals Climb 23% in 3Q
Could the Administrative Law Judge Level for RAC Appeals Disappear?

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