Continuing the Pause in RAC Program Will Cost Medicare $47 Billion

An analysis from Avalere Health reveals that the federal government will increase spending on Medicare by $47 billion over the 2016–2025 budget window if the pause in the Recovery Audit Contractor (RAC) Program is permitted to continue.

The analysis entitled, "Estimated Federal Impact of the Medicare Fee-For-Service (FFS) Recovery Audit Program," details key aspects of the RAC Program and examines trend data from RAC recoveries from FY 2010–2013.

The Avalere analysis reveals the following:

• An overall increase in improper payments of $16.1 billion between July 2010 and June 2013.
• Relatively stable improper payment rates for Part A hospital inpatient claims during this time; however, Part A claims other than hospital inpatient increased much faster, causing a substantial growth in improper payments.
• Home health claims accounted for approximately 50% of the increase in improper payments during this time period.
• The brief increase in RAC recoveries from 2010–2013 reflects CMS ramp-up in RAC review capabilities during this time period.

"Given that the Medicare FFS improper payment rate is at its highest level in history and climbing, this analysis should be a wakeup call for our nation's leaders who have been tasked to reduce improper payments and protect the Medicare program," says Kristin Walter, spokesperson for the Council for Medicare Integrity. "The combination of the continued pause of the RAC program, the reduction in the recovery of improper Medicare payments and an increase in Medicare spending is incredibly damaging to the longevity of the Medicare Trust Fund—which at the current rate of spending is predicted to be bankrupt by 2030."

For more information, visit www.medicareintegrity.org.

Source: Council for Medicare Integrity