Medicare’s recovery audit (RAC) program is more accurate in detecting overpayments to providers than its critics allege, says a recent Office of inspector General (OIG) report.  
 
But the RAC program is not as effective as it could be at spotting fraud, the OIG notes.
 
The auditors requested records on 2.6 million patient encounters that occurred during the two-year period and found errors in 50% of them; most involved care provided in settings that were too costly or were billed using incorrect codes, the report says. The average payment denial amount was $507.
 
On the other hand, RACs are also required to report cases that point to intentional health care fraud. But, in 2010 and 2011, only six of these types of cases were reported throughout the United States and most were in Florida and Texas, which are considered to be fraud “hot spots.”
 
The OIG’s report criticized the RACs for not detecting enough fraud and CMS for not investigating the leads it receives or providing training and updates that could boost the number of fraud tips. As a result, high amounts of improper payments may have continued, OIG says.
 
Only 6% of the 1.1 million cases in which a recovery auditor recommended denial of Medicare payments in 2010 and 2011 were appealed, a review of Medicare’s recovery-audit claims database shows. Hospitals won 44% of their appeals, the OIG says.
 
For tips and strategies for managing Medicare denials, turn to DecisionHealth’s coding pink sheets.