The five members of Congress who sent a letter to the Government Accountability Office (GAO) about their concerns with the Recovery Audit Contractor (RAC) pilot program have posted their letter online. We first posted on this subject here.

Specifically, the representatives are requesting the GAO to review the RAC program before it is expanded nationwide. Among their concerns, the letter’s authors claimed that:
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Yet another major payer adopts the no-pay policy for preventable errors that CMS plans to implement Oct. 1. Blue Cross and Blue Shield of Kansas City will no longer reimburse hospitals for complications resulting from certain preventable medical errors, starting Oct. 1.

Although the Blue Cross plan announced that it will implement the program with or without the support of area hospitals, six major hospitals within the Kansas City area announced their support of program.
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A CMS report published Friday says that its recovery audit contractor (RAC) pilot program identified $992.7 million in overpayments and $38 million in underpayments. In total, the RAC program returned $693.6 million in overpayments to the Medicare Trust Funds. Total administrative costs of the program were about $200 million, which included the $187.2 million in fees that RACs earned on a contingency basis.

The report states that only 14 percent of RACs decisions were appealed by providers, and among those appeals, nearly $60 million in decisions were overturned.
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The Wall Street Journal Health Blog reported today that five congressmen have asked the Government Accountability Office (GAO) to study the recovery audit contractor (RAC) program to analyze the "substantial challenges that arose during the pilot program." In addition, the congressmen are asking the GAO to review the work CMS has done "to quantify and minimize the total burden of compliance."

The five members of congress include John Dingell (D-Mich.), who heads the Energy and Commerce committee, Charles Rangel (D-N.Y.), chairman of Ways and Means, and Pete Stark (D-Calif.), who runs Ways and Means' health subcommittee.
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A July 3 article in Report on Medicare Compliance states that many hospitals are successfully getting the Recovery Audit Contractor (RAC) denials overturned.

The article reports that "CMS appeals contractors and administrative law judges overturned more than 1,000 RAC claim denials appealed by hospitals in four states toward the end of the RAC pilot, which wrapped up in March."
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The following RAC statistics were gathered from the CMS RAC Status Document FY2007: Status Report on the Use of Recovery Audit Contractors (RACs) in the Medicare Program.

• CMS gave the RACs claims with a total dollar value of $239.6 billion. These were claims that had been paid by the Medicare claims processing contractors between Oct. 1, 2001 and Sept. 30 2006.

 
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The Recovery Audit Contractor (RAC) program that concluded in March identified $371 million in improper payments during FY2007. Among inpatient hospitals, six service areas accounted for $117.2 in overpayments.

These areas, the amount of overpayments, and the total number of claims audited, include:
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