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 Biden Calls For Expansion Of RAC Program

​The Obama Administration’s Campaign to Cut Waste will seek to reduce improper health care payments by expanding the already operational Medicare Recovery Audit Contractor (RAC) program to Medicaid, potentially saving taxpayers $2.1 billion over the next five years, U.S. Vice President Joe Biden said.

Biden convened a cabinet meeting on Wednesday to outline plans for the new Medicaid waste reduction effort and other such initiatives to spur cabinet secretaries to find inefficiencies and wasteful spending in their departments.

The new Medicaid program will result from a final rule the Department of Health and Human Services (HHS) released Wednesday for the Medicaid RAC Program.

Created by the Affordable Care Act, the Medicaid RAC effort will help states identify and recover improper Medicaid payments, HHS said. Largely self-funded, the agency will pay independent auditors a contingency fee out of any improper payments they recover that took place in the previous three years.

Biden said the Medicare RAC program has already recovered nearly $670 million to date in 2011.

RACs review claims after payments have been made, using both simple and automated review processes and detailed reviews that include medical records. RACs can only go back three years from the date the claim was paid and are required to employ a staff consisting of nurses, therapists, certified coders, and a physician.

Under these new expansions, RACs will help identify and recover over- and under-payments to providers across both Medicaid and Medicare programs, HHS said.

The agency projects that this effort will save $2.1 billion over the next five years, of which $900 million will be returned to states.

The health reform law provided for a number of measures to help crack down on fraud in the Medicare and Medicaid programs, including tougher rules and sentences for criminals, enhanced screening and enrollment requirements, and stricter penalties.
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