President Obama Expands Recovery Audits

President Barack Obama has pledged to expand the use of recovery audits as a means of reducing fraud, meaning the Recovery Audit Contractor program that was enacted Jan.1 was only the beginning of the battle for healthcare providers.

It is not immediately clear how the program will expand, but at the very least it will include Medicare Parts C and D and Medicaid.

In a memorandum issued March 10, President Obama encouraged the heads of all executive departments to identify areas of overspending and reclaim the money. He announced that the use of "payment recapture audits" would be expanded and said the Director of the Office of Management and Budget will develop specific guidelines for each department over the next three months.

The White House claimed that the federal government made $98 billion in improper payments in 2009, ranging from simple mistakes to fraud, including $54 billion in improper payments through Medicare and Medicaid. President Obama's stated goal is to save or recoup at least $2 billion over the next three years through audits.

Regardless of precisely how the RAC program grows, any increase in audits will require greater oversight and more paperwork for healthcare providers. And because the auditors are paid based on how much money they return to the government, providers can expect an aggressive and persistent challenge.

For more information, contact a Barnes Dennig representative.