RAC improper payment recoveries plunge 91%

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The Recovery Audit Contractor program, which has a mission to correct improper Medicare payments by identifying and collecting over- and underpayments, saw a substantial slump in recoveries in fiscal year 2015, according to a CMS report.

RACs identified and corrected 618,966 claims in FY 2015, which resulted in $440.69 million in improper payments being corrected. That's down 83 percent from the $2.57 billion in corrections RACs made in FY 2014.

The RAC program returned significantly less to the Medicare Trust Funds in FY 2015 due to the decrease in claim corrections. In FY 2015, the program returned about $141.9 million to the Medicare Trust Funds — a 91 percent decrease from the $1.6 billion returned the year prior.

CMS said the decrease in corrections and recoveries was primarily attributable to a ban on RACs performing patient status reviews. With the publication of the FY 2014 inpatient prospective payment system rule, CMS prohibited RACs from performing inpatient hospital patient status reviews on claims for dates of admission from Oct. 1, 2013, through Sept. 30, 2015. Inpatient collections accounted for 62.6 percent of all collections in FY 2015, down from 84.2 percent of all collections in FY 2014.

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