Medicare audits to be expanded

Washington -- The use of auditors who pore over physician Medicare claims -- as well as bills from other government contractors -- to identify and recover past overpayments will be expanded under the Obama administration's latest crackdown on fraud, waste and abuse.

The president on March 10 announced a new effort to improve federal payment accountability through the use of payment recapture audits. An executive memorandum directs the White House Office of Management and Budget to develop guidance within 90 days on actions agencies across the government should take to expand the use of these reviews.

"These are payments mostly made through Medicare and Medicaid that are sent to the wrong person, sent for the wrong reason, sent in the wrong amount," the president said March 10 during a speech on health care in St. Charles, Mo. "Sometimes they're innocent errors. Sometimes they're because nobody is bothering to check to see where the money is going, and they're abused by scam artists and fly-by-night operations."

Some physicians already have experience with these types of reviews. The Medicare recovery audit contractor program was pilot-tested in three states -- California, Florida and New York -- from 2005 to 2008. During the last year of the pilot, CMS expanded it to Massachusetts and South Carolina. Its claims reviews resulted in the program recapturing nearly $1 billion for taxpayers that the RACs found Medicare had overpaid or had otherwise paid out inappropriately.

It was not immediately clear how the latest action from Obama would impact the RAC program or Medicaid. Congressional legislation enacted in 2006 already has directed the Centers for Medicare & Medicaid Services to have permanent RACs in place by 2010 to review Medicare claims from all 50 states. The agency did not respond to repeated requests for comment by this article's deadline.

Obama projected that payment recapture audits would return at least $2 billion in taxpayer money over the next three years -- double the current amount of projected recovered costs from efforts targeting waste, fraud and abuse.

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