Policy Examples

• In 2018, the Centers for Medicare and Medicaid Services (CMS) required Recovery Audit Contractors (RACs) to maintain a 95 percent accuracy score. Failing to maintain the score resulted in certain contractors receiving a progressive reduction in the number of claims they were allowed to review. source
• The Humana Provider Payment Integrity Program conducts post payment audits for services rendered by Humana members. The purpose of the audits is to identify overutilization of services or other practices that directly or indirectly result in unnecessary costs to the healthcare industry. source

Outcome Evidence

• Medicare fee-for-service and Medicaid use Recovery Audit Contractors (RACs) to review claims and detect improper reimbursement for incorrectly coded services, non-covered services, and duplicate services. Hospitals reported receiving an average of 1504 medical records requests by the end of 2016, up from 1424 in the first quarter of 2014. source
• The American Hospital Association reported that 62 percent of Medicare RAC denial appeals were overturned in favor of the provider by the end of 2016. source
• In 2018, the Medicare fee-for-service RAC program identified approximately $89 million in overpayments and recovered $73 million. source
• In 2017, a law firm reported on an increase in healthcare claims and medical documentation audit activities across the private insurance, Medicaid, and Medicare plans. The firm cites the cause for the increase in activity is the accessibility and ability to analyze large amounts of data more efficiently. source