WASHINGTON, D.C. – Congresswoman Lois Capps’ released the following statement regarding the latest Centers for Medicare & Medicaid Services (CMS) report on the Recovery Audit Contractor (RAC) program:

“Despite the Centers for Medicare & Medicaid Services’ (CMS) continued claims that the Recovery Audit Contractor (RAC) program was highly successful from its inception, we know it was plagued with serious problems that were harmful to healthcare providers and hindered their efforts to care for their patients.  I am grateful that CMS heeded the calls from me and many of my colleagues, through repeated letters and the introduction of HR 4105, to temporarily halt the program and make significant changes in how it’s being implemented.

“Still, I believe this latest report overstates exactly how much money the RAC program has been able to recoup for the Medicare Trust Funds.  Currently a significant number of healthcare provider claims are still going through the appeals process and have yet to be ruled on.  Although CMS counts those pending claims as part of the overall program savings, based on the outcomes of previous appeals which were won by providers in significant numbers, we expect that many of these pending claims will ultimately be overturned in the providers’ favor. 

“Nonetheless, I welcome some significant changes such as ensuring qualified personnel are conducting reviews, limiting the lookback period of the audits, limiting the number of claims that can be demanded from one provider at a time, increasing transparency in the program and conducting greater provider outreach and education.

“I will continue my efforts to monitor this program to ensure that when it is finally implemented it contains important safeguards to protect healthcare providers and their patients.  As part of that effort, I will be joining Chairman Charlie Rangel, Chairman Pete Stark, Chairman John Dingell and Chairman Frank Pallone in requesting a review of the RAC program as the national rollout begins from the non-partisan Government Accountability Office.  This report is necessary to ensure proper oversight of the program and reporting back to Congress.”

Background on CMS changes to the RAC program made after concerns raised by Congresswoman Capps:

·        Limit number of requests: The RAC program will now limit the number of requests to providers based on size and revenues of the facilities.  Previously an unlimited number of requests were allowed, unduly burdening health care providers as they shifted staff and critical financial resources from patient care to securing the materials necessary to comply with the numerous audit requests. 

·        Limit lookback period: The RAC program will now limit its audit “lookback” to 3 years maximum and nothing before October 2007.  Previously the RAC was auditing provider claims going as far back as 2002, prior to the passage of the law authorizing the RAC program. 

·        Improving accuracy:

   o       Independent validator will be a permanent part of the RAC process and will conduct ongoing reviews to validate RAC accuracy.

   o       Before a RAC conducts reviews of new procedures, they will have to get it approved by a review board (***Please note:  It is currently unclear who will serve on this review board.  That is being determined and Congresswoman Capps is monitoring this situation).

·        More transparency:

   o       RAC contingency fees will be made publicly available.  Currently this information is not available for public review, although press reports have indicated that one of the RAC contractors received contingency fees ranging between 25% and 30% of the value of the claim.

   o       RAC’s will have to post online the procedures they are reviewing.

·        Better Outreach: CMS and RAC’s will work with Hospital and Medical Associations in the states to conduct outreach prior to rollout in that state including introductions to RAC/CMS personnel and how the process works

·        Annual provider surveys will be conducted to evaluate how the process is working

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Pictured above: (center) Congresswoman Capps meets with Central Coast firefighters to discuss emergency preparedness.