RACs Save Taxpayers $440 Million Despite CMS Constraints

For Immediate Release Contact: Curtis Kalin 202-467-5318
December 12, 2016  

(Washington, D.C.) – Citizens Against Government Waste (CAGW) reacted with outrage after the Centers for Medicare and Medicaid Services (CMS) released its fiscal year (FY) 2015 annual report on Medicare Fee-For-Service’s Recovery Audit Program (RAC).  The report disclosed that RAC auditors uncovered 618,966 improperly paid claims and recouped $440.69 million in FY 2015.  Unfortunately, those results are significantly lower than FY 2014 due to limitations on the number of claims under review.  These limitations were imposed on the program after CMS bowed to the will of large, for-profit hospitals.

The RAC program is the most successful improper payment and fraud prevention program that CMS has ever had.  The program operates at no cost to taxpayers and is tasked with identifying and recovering improper payments to providers and returning that money to the fiscally unstable Medicare Trust Fund.  The program had been collecting $1 billion per quarter before Congress hamstrung the program in 2013.

CAGW Vice President for Policy and Communications Leslie Paige said, “Government-wide improper payments totaled $136.7 billion in FY 2015.  Medicare and Medicaid are the primary drivers of this epidemic of wasteful spending.  Since the RAC program was implemented nationwide in January 2010, it has returned more than $11.7 billion to the Medicare Trust Fund.  The RAC program should be lauded for its work in rooting out improper payments.  Instead, at the behest of an alliance between large hospitals and members of Congress, the continued restrictions are sucking the effectiveness out of a wildly successful program that saves millions of taxpayer dollars every day.  The dramatic rise in the Medicare improper payment rate since the program was sidelined underscores the need for a fully functional RAC program.  Therefore, RACs should not only be allowed to go back to work, the program should be expanded to help eradicate the mountain of improper payments that plague Medicare.”

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government. 

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