The Health and Human Services (HHS) yesterday issued a final rule to establish a Medicaid Recovery Audit Contractor program. The agency expects that this will save $2.1 billion in waste over the next five years.
The recent rule builds on the existing Medicare Recovery Audit Contractor program. It aims at guiding states about federal and state funding for the start-up, operation, maintenance costs of Medicaid RAC contractors, and the payment methodology for state payments to Medicaid RACs. It will take effect on 2 January 2012.
States will be directed to ensure that proper appeal processes are in place for providers to dispute "adverse determinations" from the contractors.
The rule was released on the same day that Vice President Joe Biden convened a Cabinet meeting at the White House to discuss the Obama administration's Campaign to Cut Waste.
A news release quoted Biden as saying, "Today's announcements on cutting waste in Medicare, Medicaid and Unemployment Insurance shows that we can make our government more efficient and responsible to the American people."
"If we're going to spur jobs and economic growth and restore long-term fiscal solvency, we need to make sure hard-earned tax dollars don't go to waste," he continued.
An HHS official said that about $668 million has been recovered this year in the Medicare Recovery Audit Contractor program, and that the Patient Protection and Affordable Care Act included the anti-fraud provision of expanding the RAC program to Medicaid.
"Of the anticipated $2.1 billion in recovered funds, about $900 million is expected to be returned to the states," the official continued. It's also expected that Medicaid RAC auditors would be paid about the same percentage10% to 12%of recovered funds as Medicare RAC contractors.