H.R. 4105, introduced Nov. 7, would place a one-year hold on the Centers for Medicare and Medicaid Services' (CMS) Medicare recovery audit contractor (RAC) program.

Dear [ Decision Maker ] ,

I'm writing as a concerned constituent regarding the CMS Recovery Audits being performed in our state.

H.R. 4105, introduced Nov. 7, would place a one-year hold on the Centers for Medicare and Medicaid Services' (CMS) Medicare recovery audit contractor (RAC) program.

We would like to ask for your support by co-sponsoring this legislation and pushing your leadership to move this bill to the floor for a vote this month.

As you will remember, The Medicare Modernization Act of 2003 established the Medicare Recovery Audit Contractor (RAC) program as a demonstration program to identify improper Medicare payments - both overpayments and underpayments. RACs are paid on a contingency fee basis, receiving a percentage of the improper overpayments and underpayments they collect from providers.

The RAC Audits have been implemented poorly by the Medicare Contractors in the demonstration states of California, New York and Florida. The basic contracts have been flawed, in that the RAC has been incented to find erroneous payments. CMS frowns upon providers who contract with billing or coding vendors based on a contingency fee. Allied health professionals with various levels of clinical expertise are overturning decisions physicians have made in the care of their patients and retracting payments previously made by the Medicare program.

CMS has reported over $3 million dollars were identified as overpayments; however, they failed to mention that most of these determinations have been appealed. Many have been overturned and many more will be. In California one provider has reported that 100% of its outpatient therapy claims were denied by the RAC auditor for being medically unnecessary. That is just not logical.

The process is extremely costly to both the hospitals and to the Medicare Program. In addition to the personnel and administrative costs of balancing each of the accounts and processing the transactions, hospitals are faced with the costs of pulling thousands of copies of medical records to be sent the RAC.

Hospitals in each of the demonstration states have had to hire extra staff to keep up with pulling, copying and sending these records. We believe that Congress did not understand the expense hospitals would face when they ordered CMS to expand RAC audits to all states.

This action could cause inflation in health care costs to cover these expenses. Medicare Administrative Contractors and Fiscal Intermediaries will also need to budget for these cost increases.

Your support of H.R. 4105 is critical to requesting CMS fix the problems with the way the current audits are being conducted.

We support fixing the problem, but the current CMS solution has created to many unintended consequences. H.R. 4105 gives Congress a chance to fix these problems, thus creating an effective audit process.

Sincerely,

Campaign Launched:
May 28, 2008