The Council for Citizens Against Government Waste (CCAGW) today sent letters to members of the United States Congress, urging members in both chambers to oppose H.R. 1250, the Medicare Audit Improvement Act of 2013, introduced by Reps. Sam Graves (R-Mo.), and Adam Schiff (D-Calif.), and the Senate version of the bill, S. 1012, introduced by Sen. Roy Blunt (R-Mo.). If enacted, the bill would negatively impact the Recovery Audit Contracting (RAC) program, one of the government’s few successful initiatives to identify and recover waste, fraud, and abuse in Fee-for-Service Medicare. The letters, which were sent to the House and Senate and can be viewed on CCAGW’s website, reads in part as follows:

“In fiscal year (FY) 2012, the Centers for Medicare and Medicaid Services (CMS) estimated that improper payments in Medicare totaled $32.4 billion. Since 2009, the recovery audit contract (RAC) program, which was created to reduce the amount of improper payments, has returned $4.5 billion to the Medicare Trust Fund.”

“H.R. 1250, if enacted, would have a chilling effect on the RAC program, one of the government’s few successful initiatives to identify and recover waste, fraud, and abuse in Medicare. Despite the bill’s purported intent to relieve the cost of compliance for some of the nation’s hospitals, this legislation will instead perpetuate shoddy billing practices by Medicare providers and relax, rather than increase, oversight of Medicare billing practices.”

“Furthermore, the bill imposes additional, unnecessary reporting requirements and penalties on RACs, even though they are already required to be the most transparent and accountable of CMS’ post-payment auditors. The bill would penalize the RACs for overturned determinations. Yet RACs are compensated on a contingency basis, operate at no cost to the taxpayers, and receive no compensation for any decisions that are overturned on appeal. According to CMS, RACs have an accuracy rating of more than 90 percent, and only 3 percent of their improper payment determinations were overturned on appeal in FYs 2010 and 2011.”

“The bill’s sponsors have argued that the program is burdensome on hospitals and have included a cap on the number of medical records a RAC may request from a health care provider. However, RACs are the only program integrity contractors that already are subject to such a cap, which is a mere 2 percent of a hospital’s Medicare claims volume. The bill instead consolidates this 2 percent cap collectively across the other audit program integrity efforts. The cap would virtually eradicate the RACs’ ability to review medical records for improper payments, the key to identifying waste, fraud, and abuse in such a cost-effective manner.”

“Finally, the bill includes a provision that would only allow audits when there is an estimated billing error rate of more than 40 percent. It is difficult to believe that members of Congress would support legislation that allows Medicare providers to bill improperly, so long as they do not hit an error rate over 40 percent. This astonishing stipulation is tantamount to sanctioning a 60 percent “success” rate, the equivalent of a failing grade in school. The error rate provision alone would cause Medicare to hemorrhage billions of dollars in improper payments. Taxpayers can and should expect a higher standard of performance from those hospitals and other Medicare providers. Indeed, there should be no minimum error rate before Medicare auditors are allowed to investigate potential waste, fraud, and abuse.”

“I urge you to oppose H.R. 1250 and similar efforts to roll back the highly effective RAC oversight program, which has already saved billions of taxpayer dollars and helped to extend the life of the Medicare Trust Fund. Furthermore, CCAGW urges you not to co-sponsor this legislation, and for those who are current co-sponsors, we urge you to reconsider your support for the bill. All votes on H.R. 1250 will be among those considered in CCAGW’s 2013 Congressional Ratings.

The Council for Citizens Against Government Waste (CCAGW) is the lobbying arm of Citizens Against Government Waste, the nation’s largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.


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