Sept 2013 – RAC update

RACs identified half of all claims they reviewed for 2010-2011 as having resulted in improper payments totaling $1.3 billion.

CMS took corrective actions to address the majority of vulnerabilities it identified in FYs 2010 and 2011; however, it did not evaluate the effectiveness of these actions. As a result, high amounts of improper payments may continue.

The Office of Inspector General (OIG) recommended that CMS:

(1) take action, as appropriate, on vulnerabilities that are pending corrective action and evaluate the effectiveness of implemented corrective actions;

(2) ensure that RACs refer all appropriate cases of potential fraud;

(3) review and take appropriate, timely action on RAC referrals of potential fraud; and

(4) develop additional performance evaluation metrics to improve RAC performance and ensure that RACs are evaluated on all contract requirements.

CMS concurred with the first, second, and fourth recommendations. CMS did not indicate whether it concurred with the OIG's third recommendation.