Medicare auditors saved program $214M in FY 2016 and 7 other things to know

Medicare auditors saved program $214M in FY 2016 and 7 other things to know

The Medicare Recovery Audit Contractor program corrected $404.46 million in overpayments and $69.46 million in underpayments in fiscal year 2016, according to CMS’ report to Congress.

Eight things to know about the 2016 results:

1. In 2016, recovery audit contractors corrected $473.92 million in improper payments, including overpayments collected and underpayments repaid to healthcare providers. That’s up 7.5 percent from $440.69 million the year prior.

2. Sixty-three percent of overpayments identified in 2016 (more than $278 million) were from inpatient hospital claims, including coding validation reviews.

3. In 2013, the HHS Office of Medicare Hearings and Appeals temporarily suspended most new requests for administrative law judge hearings regarding payment denials from recovery audit contractors. To address the backlog of Medicare appeals, which CMS offered a settlement process that paid hospitals 68 percent (of the net allowable amount) of what they claimed they were owed for short-term inpatient stays.

4. In 2016, the RAC program identified and corrected $69.46 million in underpayments to healthcare providers.

5. Recovery audit contractors receive a base rate of 10.4 percent to 14.4 percent of the improper payments recovered from, or repaid to, healthcare providers. In 2016, auditors received $39.12 million in contingency fees.

6. After factoring in contingency fees, administrative costs, and amounts overturned on appeal, the RAC program returned $214.09 million to the Medicare trust funds in 2016.

7. In 2016, 135,492 claims were appealed by healthcare providers. But the RAC report to Congress notes: “appealed claims may be counted multiple times if the claim had appeal decisions rendered at multiple levels during 2016.”

8. Of the total appealed claims, 56,724, or 41.9 percent, were overturned with decisions in the provider’s favor.

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