Medicare's recovery audit program is more accurate than critics claim, although it could detect more fraud, according to a report by HHS' Office of Inspector General, Modern Healthcare reports.
In 2006, Congress ordered Medicare to hire four private contractors -- known as recovery auditors -- to oversee Medicare payments and find cases in which providers and suppliers were being overpaid. The auditors have encountered criticism from the hospital industry, which claims that the companies are overly aggressive. Hospitals point to hospital-reported surveys that indicate at least 40% of all payments denials are appealed and 70% of those appeals are successful. Bills in the House and Senate to temper the auditors have garnered support from the American Hospital Association.
However, HHS OIG's report found that of the 1.1 million cases in 2010 and 2011 in which an auditor recommended denying Medicare reimbursements, just 6% were ever appealed and only 44% of those appeals were successful.
The report stated that CMS is falling short on investigating the leads it receives and does not provide enough training or regular updates to help generate new fraud leads. Further, the report noted that although CMS made 28 changes to its billing rules to close "vulnerabilities" found through examination of overpayment data, the department never measured the success of those changes.
In response, CMS Administrator Marilyn Tavenner said measuring the efficacy of such changes is challenging, because some require multiple steps over long periods. She added, "Some are implemented within a few months, while others take significantly longer, hindering CMS' ability to draw conclusions about the effectiveness of a specific corrective action"(Carlson, Modern Healthcare, 9/4).