Medicare RACs Collect $797.4M in Overpayments in FY 2011

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Medicare recovery auditors collected a total of $797.4 million in overpayments for the fiscal year ended Sept. 30, 2011, well above the overpayment total of $75.4 million recorded in FY 2010, according to a CMS report (pdf).

CMS also reported that RACs returned $141.9 million in underpayments back to providers this past fiscal year, up from $16.9 million in 2010. In total, corrections within the Medicare RAC program totaled almost $940 million in 2011.

The fourth quarter of 2011 (July to September) witnessed the largest amounts of over- and underpayments. CMS' quarterly newsletter (pdf) showed that RACs collected $277.1 million in overpayments in the fourth quarter alone and returned $76.6 million in underpayments.


HealthDataInsights, the Region D Medicare RAC, had the largest amount of overpayments collected in the fourth quarter at $108.2 million. Connolly, the Region C RAC, returned $60.7 million in underpayments, the most of any region.

The biggest overpayment issues by region were the following:

•    Region A (Diversified Collection Services): medical necessity reviews for renal and urinary tract disorders.
•    Region B (CGI): medical necessity reviews for surgical cardiovascular procedures.
•    Region C (Connolly): medical necessity reviews for acute inpatient admission neurological disorders.
•    Region D (HDI): medical necessity reviews for minor surgery and other treatments billed as an inpatient stay.

Related Articles on RACs:

77% of Hospital Denied Claims Overturned in RAC Appeal Process

How to Cope in This Economic Climate: 4 Thoughts From Elkhart General CFO Kevin Higdon

CMS: Medicare RACs Identify $75M in Overpayments in FY 2010

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