For Immediate Release                                    Contact:  Leslie K. Paige 202-467-5334
January 14, 2008                                                        Alexa Moutevelis 202-467-5318 

CAGW Denounces Efforts to Scuttle Medicare Provider Audits
Taxpayers Deserve to Reclaim Millions in Improper Payments to Hospitals

Washington, D.C. - Citizens Against Government Waste (CAGW) today reiterated support for the Centers for Medicare and Medicaid Services’ (CMS) efforts to recover hundreds of millions of dollars in improper medical payments made to hospitals and healthcare providers using the Recovery Audit Contractor (RAC) Program.  RACs, which are private sector auditing companies that specialize in uncovering improper payments to hospitals and healthcare providers, have offered a common-sense solution to the leakage of billions in overpayments and underpayments to healthcare contractors.  Audits being conducted in three states (California, New York, and Florida) as part of a CMS demonstration project launched in 2005 have exposed $299.5 million in improper payments.  However, despite Medicare officials’ pronouncements that the audits are a deterrent to fraud, some politicians are lining up to gut the program before it rolls out nationwide even though millions are being funneled back into the Medicare Trust Fund.

According to a November 16, 2007 statement by CMS acting director Kerry Weems, the agency has recently seen the payment error rate drop significantly. That translates into $11 billion that the government has retained instead of seeing it paid to healthcare providers who billed for it erroneously.  

“This program is reducing billing errors, fraud, and abuse, and it is now being undermined by the very people who were elected to protect taxpayers,” said CAGW President Tom Schatz.  H.R. 4105, co-sponsored by Reps. Lois Capps (D-Calif.) and Devin Nunes (R-Calif.) would place a one-year moratorium on the RAC program.  “It is clear that Reps. Capps and Nunes are more interested in kowtowing to pressure from hospitals in their districts that billed for millions they were not entitled to, than in shielding taxpayers from huge losses.  If H.R. 4105 passes, these politicians will one day have to rationalize to taxpayers why they protected healthcare companies who overbilled Medicare and depleted the Medicare Trust Fund in the process.”

Hospitals in California that have been audited for improper payments have complained that RAC auditors’ demands for billing records have been too onerous, that the RAC auditors should employ medical doctors when reviewing the claims, that RACs were demanding records too far back, and that auditors were collecting contingency fees before the appeals process was completed.  Although the companies and CMS have addressed each of those concerns, efforts to stymie the program and misinform the public have continued.  “The program should continue,” said Schatz.  “The process has been studied enough.  The government has a fiduciary obligation to reclaim the millions it has lost to mistakes, fraud, and mismanagement and return that money to the Medicare Trust Fund.”

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government. 

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