Get ready for more Medicare audits

President Obama has announced a new effort to identify and recover past Medicare overpayments by expanding Medicare payment recapture audits. The president predicted that the audits would return at least $2 billion in taxpayer money during the next 3 years. The White House Office of Management and Budget has been directed to develop guidance within 90 days on actions that agencies across the government should take to implement the expansion effort.

The Medicare recovery audit contractor (RAC) program was pilot tested in California, Florida, and New York from 2005 to 2008, when it was extended to include Massachusetts and South Carolina. According to a 2008 report by the Centers for Medicare and Medicaid Services, the 3-year RAC pilot program recovered only about $20 million in overpayments by auditors of physician claims. The vast majority of the nearly $1 billion of recoveries came from hospitals.