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CMS Identifies Total Improper Payment Figures

CMS released a short but useful Recovery Audit Contractor (RAC) update on its website last week reporting the total amount of improper payments identified since the RAC demonstration period.

From October 2009 through the end of March 2011, RACs identified $312.2 million in overpayments and $52.6 million in underpayments, totaling $365.8 million in improper payments. Compared to the $1.03 billion of improper payments identified in the demonstration program, these numbers are minuscule, but a significant bump last quarter may indicate significant growth is on the way.

The doubled amounts ($184.6 million) in the first quarter of 2011 is a true reflection of the rapid expansion of RAC audits.

In addition to the identification of total improper payments, CMS also highlighted the top RAC issue per RAC region from the fiscal year 2010 through March 2011. Incorrect coding causes two of the four issues identified. The others are caused by billing for bundled services (DME provided during an inpatient stay) separately, which should trigger providers to investigate a potential area of vulnerability.

Providers need to be paying attention when they have separate national provider identifiers (NPI) that are providing various pieces of services and billing Medicare separately.

We will keep you updated as CMS comes out with other potential areas to improve on and be made aware of as causes for incorrect Medicare billing.