Medicare auditors find $593 million in incorrect payments

Physician organizations have been critical of the audit program, citing a high error rate.

By Charles Fiegl — Posted Oct. 20, 2011

Print  |   Email  |   Respond  |   Reprints  |   Like Facebook  |   Share Twitter  |   Tweet Linkedin

More than half a billion dollars in improper payments has been uncovered by Medicare auditors during the first nine months of the 2011 fiscal year.

The amount far exceeds what Medicare recovery audit contractors, or RACs, found in 2010, according to an October report to Congress by the Centers for Medicare & Medicaid Services. Last year, contractors for the Medicare program made $135.6 million in overpayment demands and collected $75 million from hospitals, physicians and other health professionals. Contractors also found $16.9 million in underpayments, which have been returned to health professionals (link).

A report on the 2011 fiscal year shows $592.5 million in improper payments between Oct. 1, 2010, and June 30, 2011. RACs collected $233.4 million during the third quarter (link).

Physician organizations and groups representing the health care industry have been critical of the audit program. Requests from RACs can take hours to fill, and demands for overpayments are unjustified at times, the groups say.

The American Medical Association has been concerned about the administrative burden placed on physician practices. The AMA notes that physicians and other health professionals won 46% of the 8,449 audit claims appealed in 2010, keeping $2.6 million in Medicare payments from being recouped by contractors.

"The error rate in the Medicare RAC process is disturbingly high, especially since the cost of filing an appeal can be prohibitive," said AMA President Peter W. Carmel, MD. "The AMA is working with CMS to improve this process and decrease the financial and administrative burden on physicians."

The report to Congress shows that contractors were most active in the western and southern regions. HealthDataInsights, a contractor based in Las Vegas, collected $30.9 million in overpayments, including $7.7 million in California and $5.3 million in Washington. Philadelphia-based Connolly Healthcare found $24.4 million, including $7.1 million in Florida and $5.8 million in Texas.

Back to top



Read story

Confronting bias against obese patients

Medical educators are starting to raise awareness about how weight-related stigma can impair patient-physician communication and the treatment of obesity. Read story

Read story


American Medical News is ceasing publication after 55 years of serving physicians by keeping them informed of their rapidly changing profession. Read story

Read story

Policing medical practice employees after work

Doctors can try to regulate staff actions outside the office, but they must watch what they try to stamp out and how they do it. Read story

Read story

Diabetes prevention: Set on a course for lifestyle change

The YMCA's evidence-based program is helping prediabetic patients eat right, get active and lose weight. Read story

Read story

Medicaid's muddled preventive care picture

The health system reform law promises no-cost coverage of a lengthy list of screenings and other prevention services, but some beneficiaries still might miss out. Read story

Read story

How to get tax breaks for your medical practice

Federal, state and local governments offer doctors incentives because practices are recognized as economic engines. But physicians must know how and where to find them. Read story

Read story

Advance pay ACOs: A down payment on Medicare's future

Accountable care organizations that pay doctors up-front bring practice improvements, but it's unclear yet if program actuaries will see a return on investment. Read story

Read story

Physician liability: Your team, your legal risk

When health care team members drop the ball, it's often doctors who end up in court. How can physicians improve such care and avoid risks? Read story

  • Stay informed
  • Twitter
  • Facebook
  • RSS
  • LinkedIn