By CAGW, Special for USDR.
Today, Citizens Against Government Waste (CAGW) named Rep. Sam Graves (R-Mo.) its May Porker of the Month for his misguided and costly proposal to gut the Center for Medicare and Medicaid Services’ (CMS) Recovery Audit Contractor (RAC) program.
Medicare improper payments have been a chronic fiscal scourge. In fiscal year (FY) 2014 alone, $46 billion was lost in the program’s fee-for-service improper payments, the most of any federal program. In an effort to stem the tide of these improper payments, Congress approved the nationwide adoption of the RAC program in January 2010; it has returned more than $9.7 billion to the Medicare Trust Fund with a 96 percent average accuracy rate. Those savings become even more impressive since auditors are allowed to review no more than 2 percent of claims from a given provider. Under pressure from hospitals and other providers, Congress and CMS have collaborated to sideline the RAC program since October 2013. It is no coincidence that the Medicare improper payment rate jumped by 49 percent from 8.5 percent in FY 2012 to 12.7 percent in FY 2014.
There are few bills so wrongheadedly and laughably named as H.R. 2156, Rep. Graves’s Medicare Audit Improvement Act of 2015. The bill takes direct aim at the RAC programs’ most positive feature: its contingency fee based compensation model, which operates at no expense to taxpayers. RACs are paid only for when improper Medicare payments are identified and the overpayments are recovered to replenish the Medicare Trust Fund. This same payment system is used by private sector insurers to recover improper payments from the same providers that serve Medicare patients. Removing it would lead to appropriations of substantial sums of taxpayer money to pay contractors to perform the audit function. The funds to conduct audits would have to compete with other expenditures or be offset with spending cuts, and there is no assurance that any recovered money would go into the Medicare Trust Fund.
In addition, Rep. Graves is relying on flawed and exaggerated claims to make his case against the RACs. Allegations that RAC judgments are overturned on appeal at a dramatically high rate are simply untrue. CMS’s most recent data from FY 2013 shows that 9.3 percent of claims were overturned at the administrative law judge (ALJ) level, the third tier of the appeals process. Anti-RAC forces also claim that the program puts an onerous burden on providers. That assertion is ludicrous on its face since it cannot possibly require more than a few employees to assist RACs in their review of no more than 2 percent of claims from any one provider, and RACs must pay providers for any additional document requests. On the other hand, the cost of appealing RAC audits is so low that a few hospitals have become “frequent filers” by appealing every denied claim and are responsible for vast majority of the appeals to the ALJ level.
CAGW President Tom Schatz said, “If Rep. Graves’s bill is signed into law, it will do irreparable damage to the Medicare post-payment process by opening the floodgates to a tidal wave of new waste in the form of billions of dollars in improper payments. Congress should reinstate and expand the RAC program, not cause it to be permanently paralyzed. Instead of attacking the RAC program and flooding the appeals process, providers should direct their resources toward better compliance with CMS rules for accurate Medicare claims.”
For his attempt to destroy the most successful auditing tool that Medicare – and perhaps the entire federal government – has ever had, CAGW names Rep. Sam Graves its May Porker of the Month.
Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government. Porker of the Month is a dubious honor given to lawmakers, government officials, and political candidates who have shown a blatant disregard for the interests of taxpayers.